Do the rights of beneficiaries in a Will supersede a Tenant in Common in the deeds?

[Skippy123]

The father of a family friend has recently passed away and his last Will divided his property equally between his four children. However, when checking the house deeds, it has come to light that the elder sibling was added to the deeds some years ago as a Tenant in Common and, our friend isn't sure whether:
a) the elder sibling who is the Tenant in Common is now the sole owner of the property or does the direction of the Will supersede this?
b) there are Capital Gains Tax implications?

Any help would be much appreciated.

[atticus]

The child who is tenant in common retains his share. That is his. it is not his father's, and so does not come within his father's estate.

The father's share is to be dealt with in accordance with his will. It appears that a part of that share will go to the child who is tenant in common.

[Pezza54]

If the property is sold during the administration period and the sale price achieved is above the probate value, there may be cgt to pay by the estate (via executor) and the elder sibling.(cgt amount based on value at the time of transfer and financial circumstances/cgt allowance in the financial year of sale)
If the property is sold at a higher value than probate after the father's share has been transferred to the siblings, all 4 siblings may be liable to pay cgt, depending on their individual financial circumstances

[Skippy123]

Many thanks for the reply.

Please can you let us know if this means that the child who is the Tenant in Common retains his share from the deeds, along with one quarter share from the Will?

If they choose to sell the property would there be a Capital Gains Tax charge for each of the siblings?

[Pezza54]

Post 2 answered your first question and post 3 answered your second question

[Pezza54]

Looking at the times of the posts, I just beat you to the post

[PallasAthena]

I'm assuming all 4 children are adults.

If the child who is co-owner as tenant in common does not live in the house and was given the part ownership as a gift then when the house is sold he is likely to be liable for CGT on the difference between the open market value at the time he was gifted it and the price it sells for (assuming that is also an open market sale). This will be the case whatever the Will says because it has nothing to do with the Will. If the house is registered at the Land Registry as having two tenants in common - the elder sibling and the recently deceased father - it is normally assumed for CGT and IHT purposes that they owned 50% each unless a formal document had been drawn up with some other percentage.

So the CGT liability is going to depend in part what the executors and/or the 4 siblings decide to do with the house. If it is decided, for example, that the house will be sold and the 50% of the sales proceeds for their father's share paid out as cash then any CGT liability will depend on whether the house has increased in value between the valuation for probate at date of death and the (open market) sale price.

My comments here are just to give a flavour of the issues that might arise. CGT can be more complicated than that and I recommend you get professional advice from a solicitor or accountant once a decision has been made about what is to happen to the house.

Please can you let us know if this means that the child who is the Tenant in Common retains his share from the deeds, along with one quarter share from the Will?

Yes. Which also means if the house is sold he could have two separate CGT calculations to make, one for his 50% TIC and one for his 12.5% inherited under the Will (unless the hoseu is sold by the executors before transfer to the beneficiaries and the estate has paid the CGT if any).

[atticus]

Many thanks for the reply.

Please can you let us know if this means that the child who is the Tenant in Common retains his share from the deeds, along with one quarter share from the Will?

Almost. He retains his share, plus one quarter of whatever share his father had.

[Skippy123]

Sincere thanks to everyone for your helpful responses.