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Hi. This relates to the treatment of a house that is part of an estate, My Dad passed last year and his estate has been granted probate - his intention is that the estate should be split equally between two beneficiaries. I've tried to find answers on other threads - but the one's I found don't seem address the exact questions I have, so apologies for any replication.
We are in the process of splitting the estate between two beneficiaries (my brother and myself). The bulk of the estate 2/3 is the house, with the other third made up of cash already in an executor account. One beneficiary (myself) would like to keep the house. My brother is happy with this, but would like me to pay him the balance in cash (i.e. 1/6), via the executor account. My partner and myself were in the process of arranging a mortgage to cover this - until the mortgage provider indicated this would considered a "sale" rather than settlement of the estate, and therefore subject to stamp duty, as well as indicating various other solicitor fees. My brother is also then concerned he would be subject to capital gains tax on any money received - even though this is due to him through the execution of the Will.
I saw another thread where one response indicated it was a sale - but another response indicated that as long as it is addressed properly (a deed of variation) one or more beneficiaries could raise £xxxk between them to reimburse the other beneficiary for their house share and the third beneficiary would also receive all the other asset value. They then asked if this would be through private funds or a mortgage - but it wasn't clear if this made a difference.
> Is this considered a sale - or just a reimbursement?
> Is stamp duty payable? If so is this on the full value of the home? Or just the value of the reimbursement? (is there any legitimate way to avoid paying this?
> Does it make a difference if the difference is funded privately or through a mortgage? What is the difference?
> Does capital gains tax apply? Is this to the person - or to the estate?
Are there any other questions I should be asking?
We recognise we may need to get legal advice - but I like to know exactly what I'm asking and have some idea about the subject area prior!
Many thanks
Peridot - you have responded on some of the threads I found and seem to know this subject area well.
We are in the process of splitting the estate between two beneficiaries (my brother and myself). The bulk of the estate 2/3 is the house, with the other third made up of cash already in an executor account. One beneficiary (myself) would like to keep the house. My brother is happy with this, but would like me to pay him the balance in cash (i.e. 1/6), via the executor account. My partner and myself were in the process of arranging a mortgage to cover this - until the mortgage provider indicated this would considered a "sale" rather than settlement of the estate, and therefore subject to stamp duty, as well as indicating various other solicitor fees. My brother is also then concerned he would be subject to capital gains tax on any money received - even though this is due to him through the execution of the Will.
I saw another thread where one response indicated it was a sale - but another response indicated that as long as it is addressed properly (a deed of variation) one or more beneficiaries could raise £xxxk between them to reimburse the other beneficiary for their house share and the third beneficiary would also receive all the other asset value. They then asked if this would be through private funds or a mortgage - but it wasn't clear if this made a difference.
> Is this considered a sale - or just a reimbursement?
> Is stamp duty payable? If so is this on the full value of the home? Or just the value of the reimbursement? (is there any legitimate way to avoid paying this?
> Does it make a difference if the difference is funded privately or through a mortgage? What is the difference?
> Does capital gains tax apply? Is this to the person - or to the estate?
Are there any other questions I should be asking?
We recognise we may need to get legal advice - but I like to know exactly what I'm asking and have some idea about the subject area prior!
Many thanks
Peridot - you have responded on some of the threads I found and seem to know this subject area well.
