Half share passed to grandchildren?

[Windymiller]

Hi everyone, I hope you can help.
My father and his sister owned a house 50/50
His sister died over 4 years ago. She left her half share to her only child, her son. But in the will it stated that he should be allowed to live in the house.
Only when he moved would half the proceeds of the sale be given to her son.
Her son died in 2022.

My father's just died. His estate is to be divided between myself and his brother.
I've downloaded the deeds from the Land Registry and both my dad's name and his sister are still on there.

My question is, would the whole value of the house be passed to me and his brother (after IHT of course) or would her deceased son's own children be entitled to half a share?
In the deceased son's will it just states his estate is to be divided between his children, which it has been.

Thank you

[atticus]

The first question, a very important one, is whether your father and his sister owned the property as tenants in common or joint tenants. What you have said suggests the former. The Land Registry title needs to be checked, as everything will flow down one of two different paths depending on the answer to that first question.

[Pezza54]

Your cousin inherited a 50% share in the property when your aunt died.
When your cousin died his 50% share in the property became part of his estate. His will states his estate is to be divided between his children so his children are entitled to 50% of the proceeds of the house sale.
This would be the normal process but your aunt's will may infer something different and you should obtain legal advice on the wording in her will. Did her will state her son should contribute to the house bills. If an agreement was made between your father and cousin about the bills, did your cousin owe any money to your father when he died?

[atticus]

That applies if tenants in common, not if joint tenants.

[Pezza54]

I made the assumption that the property was owned as tenants in common but as atticus says if the property was owned jointly your aunt's 50% share would pass direct to your father.

[Windymiller]

Thanks Pezza54 and atticus
for your replies.

Not sure if it was Tenant's in Common or Joint Tenants
On the Land Registry title it says my father and aunt are the registered owners. It also says 'Proprietor - (names of my aunt and father)'

In my aunt's will it says "My trustees [my father, actually] shall permit my brother (name) to live in the house free of charge as long as he keeps the house in repair, insures it, and pays all outgoings relating to it." - so no input from my cousin.

Whether my dad bought my cousin's half of the house from him (or even needed to), we don't know at this stage.

[des8]

If owned as Tenants in Common there will be a restriction in Section B Proprietorship Register that states:
"No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court".

[Pezza54]

Sorry I read the 3rd para in your thread as your aunt's son could live at the property, not your father.
A testator cannot gift assets in a will that are owned jointly. Your aunt's solicitor would have known this when drafting her will.
Did you pay £3 to search the Land Registry and download the pdf file?
Is there a Section B restriction?

[Windymiller]

Thanks des8 for joining in.
I did pay £3 to the Land Registry and downloaded the PDF.

There is no restriction in section B

[atticus]

That suggests Joint Tenants. It is possible that the joint tenancy was 'severed' - amongst the deceased's papers are there any letters or other documents about this?

It might be sensible to pay a solicitor to look at the documents and advise.

[Windymiller]

I care for my mum 24/7 so my uncle is searching for his papers, difficult, as my dad hid them all over the house.
We'll definitely be getting solicitors to do the probate work as there's another property (rented out) involved.
My uncle is in touch with my dad's accountant, though.
If I was to have a guess, I don't think the joint tenancy would have been severed.

[Pezza54]

If it turns out your father had full ownership of the house at the time of his death, it will be part of his estate and pass to you and your uncle.
Your cousin's children are probably still in possession of your aunt's will and will expect half of the proceeds of the house when it is sold. They will be upset when they realise your father was the sole owner as the property was owned as joint tenants.
The children may have a professional negligence claim against the solicitor that drafted your aunt's will. Your aunt clearly wanted and thought her half share would pass to her son. The solicitor should have checked how the property was owned and if necessary made an application to sever the joint tenancy and change ownership to tenants in common.

[Windymiller]

Hi everyone, an update and a further question.
My uncle has found a letter from my late aunt's solicitor - it turns out my father and aunt were changed to tenants in common.

So my father's estate is now half of the (approx) £700k house and his £300k house he rented out. (Approx £650k)
Myself and my uncle will get 50% each of his estate.
My question - when does inheritance tax kick in - is it 375k or 500k?

[Pezza54]

Provided your father didn't make any gifts over the annual allowance in the last 7 years of his life his estate is entitled to £325k NRB IHT
As 50% of 50% of the approximate value (£700k) of the house is passing to you (a direct descendant), £175K RNRB can be added making a total of £500k NRB.
The additional £175k RNRB should be applied for separately by sending the correct form to HMRC

[Windymiller]

Thanks, Pezza54 - no gifts over the allowance. It's all in the hands of a solicitor, so they will apply for the extra 175k.
I was thinking as only (approx) £350k of his main residence would be available to myself and his brother, the IHT would have to be paid on the rest of his estate.