Peter Miller and his wife, Hilary Kingsley, downsized four years ago years ago from a large family home in South-West London that they had lived in for decades, to a smaller house just down the road. Although they are happy with their move, the process was not without its problems. Here, Peter shares what he wishes he’d known before they’d started.

We knew the time had come to downsize when we received a quote to repair the roof. It was more than we’d paid for the house. After 35 years and, fearing worse was to come, we decided to move. So learn from our mistakes, and you just might find new vitality in your new home.

Downsizing is not for the faint-hearted and the first rule is don’t leave it so long that you’re both too doddery to pack a suitcase, let alone box up the contents of all those rooms you once thought you needed. Or your final move could be in a box.

Don’t rush into choosing an estate agent. It may be a long time since you last moved so keep them at bay until you’ve done your research. Beware the pushy one who, before you’ve agreed terms, is on the phone telling you he’s got ‘a chain-free cash buyer who is prepared to complete in four weeks’.

Spend time looking in agents’ windows and online to get an idea of what your home is worth so you can get the balance right: what to spend on the new house and how much you want left in the bank for self-care, a world cruise and/or a contribution to the children or even grandchildren’s home-buying fund.

Calculate carefully what moving is going to cost. There will be the agent’s fees, conveyancing fees, removal firm costs and possibly Stamp Duty to pay on the house purchase. And don’t forget what you might want to spend on renovating your new home. It could add up to a ­formidable sum.

We bought our old (then dilapidated) house in a sought-after area of Wimbledon in 1984. My mother-in-law was appalled and pleaded with us to find somewhere else.

‘You’ll be moving into a derelict house,’ she wailed. It wasn’t quite that bad and it ticked all the boxes when it came to the ­ultimate commandment for property buying: ‘Location, ­location, location’.

Besides having to renew all the utilities and decorate ­throughout, we also had to bag up and remove a vast quantity of coal from the cellar and demolish a rusty oil tank in the front ­garden.

Peter Miller and his wife, Hilary Kingsley, downsized four years ago years ago from a large family home in South-West London

Peter Miller and his wife, Hilary Kingsley, downsized four years ago years ago from a large family home in South-West London

Peter Miller and his wife, Hilary Kingsley, downsized four years ago years ago from a large family home in South-West London

But we created a home that was right for working parents, three children, a succession of au pairs and a widowed parent.

It was a prime location and benefited from a series of unprecedented property booms. But where and into what should we downsize?

It’s easier to say where not to go. Don’t risk somewhere you’re unsure of simply because properties in that area are cheaper and you’ll end up with more in the bank. There’s always a reason they are cheaper. Think twice about moving to that pretty country village or the seaside town you’ve been to on holiday. Living there year round will be very different.

Unless you’re certain you’ll thrive somewhere new, stay in the same area to be close to the friends, shops and bars you know. But you don’t have to go to quite the extreme we did — and only move 800 yards.

Decide on the minimum number of bedrooms you’ll need. We settled on three: one for us, one for guests and one to compensate for lost storage space. Then make sure there’s enough living space. You may need space for two TVs, if one of you is a sports fan and the other binges Netflix.

Draw up a list of ‘must haves’. Ours included separate bathrooms to ensure that our marriage, if it survived the move, wouldn’t end in divorce over fears at the prospect of the other’s wet towels on the same floor. If like us, you have a cat, make sure a cat flap can be fitted and have someone ready to install one. Decide if off-street parking is a priority. A driveway will avoid paying for a parking permit and stop the frustration of competing with the neighbours when a spot is free.

Probably the best thing we did at the new house was to insulate the loft and fit a ladder that came down at the press of a button.

It is easy to store our suitcases, Christmas decorations, picnic stuff and boxes of things we won’t throw away.

Don’t underestimate the space you’ll need, especially if you’ve been rattling around in a large house for decades. We ­underestimated — and ended up building an extension.

Ready to put up the ‘For Sale’ sign? That’s when it starts to get boring and tense. Boring because we had to keep the house clean and tidy 24/7 and tense because after every viewing we anguished if it was going to produce the buyer.

We signed up with an agent we knew well and there was a lot of interest but no realistic offers so we brought in a second agent on a joint agency deal which meant they shared the commission. Inevitably, the first agent still found us a buyer. But it was on condition it could be independently valued by another agent.

They brought in a posh London firm and their representative turned up with someone from the local office and that person then contacted our buyer offering to show her all the ‘better value properties’ on their books.

Then they allegedly found a bat dropping in the loft and used this to justify a price reduction. Strong words were exchanged.

Delighted though we were at the prospect of a ‘sold’ sign, we still hadn’t found a property we liked. But our buyer was prepared to wait and proposed we exchange contracts and complete within a year.

Do we regret moving? Not at all and nor do our children, writes Peter

Do we regret moving? Not at all and nor do our children, writes Peter

Do we regret moving? Not at all and nor do our children, writes Peter

So we had a year to find a new house and, assuming we did, we could give the buyer four weeks’ notice to complete.

Even so we found a smaller place we liked quite quickly. The snag was it was let and the ­tenancy had four months to run. So we agreed with the seller to exchange contracts immediately and complete four weeks after the tenants left.

I wouldn’t recommend such a complex deal — but thanks to our lawyer it worked.

They say that old age isn’t for wimps. Nor is downsizing. Those intervening four months proved extremely stressful and you might have even less time to prepare. Be ruthless. We told our children to ‘yellow sticker’ anything they wanted that we weren’t taking and we would dump the rest. But we still weren’t ruthless enough and ended up renting a garage. Decluttering is vital before the removal van arrives.

You’ll find you’ve acquired at least twice as many clothes, shoes and accessories than you need. Too many beds, chests of drawers, rugs? Our fussy kids turned their noses up. In good time, think about calling The British Heart Foundation, which sends out vans with helpful, strong men who will remove and display your unwanted goods at their ­furniture shops.

Don’t try to do the actual move on the cheap. If you’re a serious downsizer then pay for a proper removal firm even if you’re only moving a short distance. And on the big day, tip the removal men in advance. Ours were so grateful they even helped hang the curtains. Be prepared for the task of changing all your standing orders and direct debits for utility bills and other household payments. Try to stay calm during the inevitable ‘you’re in a queue’ messages. And don’t expect the wi-fi to be working the day you move.

Do we regret moving? Not at all and nor do our children but we all miss the large dining room where we enjoyed Christmas lunch. We discovered too late that the new owner was going to gut the place otherwise we would have asked about the three marble fireplaces that probably ended up in a skip or the back of a builder’s van.

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I accept there would only have been room for one in the new house. But we could have kept the other two in the loft!

A final word of warning: if you’re moving after decades in the same house, don’t get alarmed if you continue to get off the bus at what used to be your stop or regularly drive home from work to the old house.

A friend of ours who had just moved, parked outside his old house out of habit when he met friends for a drink.

At the end of the evening, he walked home to his new house, woke up the next morning and — when he couldn’t see the car on the drive — nearly called the police fearing it had been stolen. Then he remembered.

Downsizing can help you reduce the inheritance tax bill paid on your estate when you pass away – but make sure you understand the rules.

There is a special allowance to enable you to pass on a family home up to the value of £1 million tax free – so long as you leave it to direct descendants.

Known as the Residence Nil Rate Band (RNRB), it allows a couple to pass on a £1 million family home to children, grandchildren, step, adopted or foster children.

A single person has a £500,000 allowance. This is made up of the main inheritance tax (IHT) allowance of £325,000 per person or £650,000 for a married couple, plus an extra £175,000 per person for passing on a family home.

However, if you downsize from the family home to a less valuable property, your estate may still qualify for the RNRB.This is designed to ensure your estate is no worse off because you moved to a less valuable property in later life.

Take, for example, a widow who sells the family home for £500,000 and moves into a flat that costs £200,000. At the time of sale she would be entitled to the RNRB of herself and her deceased husband of £350,000. By downsizing, she has lost the chance to use £150,000 of their RNRB (£350,000 minus the £200,000 she has used).

When she dies, her flat is still worth £200,000 and she leaves this – and the remainder of her estate worth £700,000 – to her daughter. The estate is able to use her RNRB to shelter the property from inheritance tax, plus the £150,000 that would have been available had she not downsized. That means there is no inheritance tax to pay on the flat – and there is a full £325,000 IHT allowance that can be used on the remainder of her estate.

You can read more at gov.uk/guidance/inheritance-tax-­residence-nil-rate-band.

Downsizing can also help reduce your inheritance tax bill if you use money released to help fund retirement or use it towards future care costs. Faye Church, a senior chartered financial planner at the wealth manager Investec Wealth & Investment, says: ‘By downsizing and bringing your total assets to under £1 million you can avoid inheritance tax.’

She adds: ‘This money can also benefit from further tax breaks if you put it into an Individual Savings Account (Isa). Isas are a great way of providing tax efficient income and growth, whether invested in stocks and shares or cash.’

If you use money released from downsizing to make gifts to friends and family, there will be no inheritance tax to pay if you live for another seven years.

Church says: ‘You can give your children as much money as you wish when downsizing – though it is worth considering gifting money into trust to ensure you retain an element of control. For example, if your child was to later divorce, their partner might have a claim on this money unless it is held in a trust.’

Wealthy families also need to be aware that the RNRB allowance is reduced by £1 for every £2 of an estate that is worth more than £2 million. So, a couple owning an estate worth £2.7 million or more loses the entire tax break and only benefits from their joint £650,000 IHT allowance. The RNRB allowance is also lost if you do not leave your property to direct descendants.

How loved ones could inherit up to £1m tax-free

By Toby Walne 

Downsizing can help you reduce the inheritance tax bill paid on your estate when you pass away – but make sure you understand the rules.

There is a special allowance to enable you to pass on a family home up to the value of £1 million tax free – so long as you leave it to direct descendants.

Known as the Residence Nil Rate Band (RNRB), it allows a couple to pass on a £1 million family home to children, grandchildren, step, adopted or foster children.

A single person has a £500,000 allowance. This is made up of the main inheritance tax (IHT) allowance of £325,000 per person or £650,000 for a married couple, plus an extra £175,000 per person for passing on a family home.

However, if you downsize from the family home to a less valuable property, your estate may still qualify for the RNRB.This is designed to ensure your estate is no worse off because you moved to a less valuable property in later life.

Take, for example, a widow who sells the family home for £500,000 and moves into a flat that costs £200,000. At the time of sale she would be entitled to the RNRB of herself and her deceased husband of £350,000. By downsizing, she has lost the chance to use £150,000 of their RNRB (£350,000 minus the £200,000 she has used).

When she dies, her flat is still worth £200,000 and she leaves this – and the remainder of her estate worth £700,000 – to her daughter. The estate is able to use her RNRB to shelter the property from inheritance tax, plus the £150,000 that would have been available had she not downsized. That means there is no inheritance tax to pay on the flat – and there is a full £325,000 IHT allowance that can be used on the remainder of her estate.

You can read more at gov.uk/guidance/inheritance-tax-­residence-nil-rate-band.

Downsizing can also help reduce your inheritance tax bill if you use money released to help fund retirement or use it towards future care costs. Faye Church, a senior chartered financial planner at the wealth manager Investec Wealth & Investment, says: ‘By downsizing and bringing your total assets to under £1 million you can avoid inheritance tax.’

She adds: ‘This money can also benefit from further tax breaks if you put it into an Individual Savings Account (Isa). Isas are a great way of providing tax efficient income and growth, whether invested in stocks and shares or cash.’

If you use money released from downsizing to make gifts to friends and family, there will be no inheritance tax to pay if you live for another seven years.

Church says: ‘You can give your children as much money as you wish when downsizing – though it is worth considering gifting money into trust to ensure you retain an element of control. For example, if your child was to later divorce, their partner might have a claim on this money unless it is held in a trust.’

Wealthy families also need to be aware that the RNRB allowance is reduced by £1 for every £2 of an estate that is worth more than £2 million. So, a couple owning an estate worth £2.7 million or more loses the entire tax break and only benefits from their joint £650,000 IHT allowance. The RNRB allowance is also lost if you do not leave your property to direct descendants.

This post first appeared on Dailymail.co.uk

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