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  • FIRST POST
    • Tom99
    • By Tom99 9th Jun 17, 10:13 AM
    • 11Posts
    • 2Thanks
    Tom99
    Assent of Equitable Interest part of property only
    • #1
    • 9th Jun 17, 10:13 AM
    Assent of Equitable Interest part of property only 9th Jun 17 at 10:13 AM
    I am administrator of my father's estate, have obtained probate and will be selling my fathers house.

    There are seven beneficiaries each of whom have a percentage interest and there will be a final inheritance tax bill due after the sale of the house.

    Because it has taken some time to obtain probate and market the house, values has risen. As a result Capital Gains Tax will be paid by the estate.

    This tax can be reduced by transferring the property to the beneficiaries before contracts are exchanges on the sale. Each beneficiary will then be able to use their 11,300 annual allowance. However enough would need to be left in the estate to cover the inheritance tax bill.

    I would like to use an Assent of Equitable Interest to transfer 75% of the beneficial interest (note not the legal interest) to the beneficiaries leaving a 25% share in the estate to pay inheritance tax. The assent would not need to be registered with the Land Registry since the legal title remains with the estate.

    Is it possible to assent only part of the property in this way?

    Thank you
Page 1
    • Yorkshireman99
    • By Yorkshireman99 9th Jun 17, 10:24 AM
    • 2,474 Posts
    • 1,984 Thanks
    Yorkshireman99
    • #2
    • 9th Jun 17, 10:24 AM
    • #2
    • 9th Jun 17, 10:24 AM
    I am administrator of my father's estate, have obtained probate and will be selling my fathers house.

    There are seven beneficiaries each of whom have a percentage interest and there will be a final inheritance tax bill due after the sale of the house.

    Because it has taken some time to obtain probate and market the house, values has risen. As a result Capital Gains Tax will be paid by the estate.

    This tax can be reduced by transferring the property to the beneficiaries before contracts are exchanges on the sale. Each beneficiary will then be able to use their 11,300 annual allowance. However enough would need to be left in the estate to cover the inheritance tax bill.

    I would like to use an Assent of Equitable Interest to transfer 75% of the beneficial interest (note not the legal interest) to the beneficiaries leaving a 25% share in the estate to pay inheritance tax. The assent would not need to be registered with the Land Registry since the legal title remains with the estate.

    Is it possible to assent only part of the property in this way?

    Thank you
    Originally posted by Tom99
    You really need paid for specialist legal advice as to how you can do this, even if you can do it at all. It is emphatically not something you can DIY.
    • Tom99
    • By Tom99 9th Jun 17, 11:03 AM
    • 11 Posts
    • 2 Thanks
    Tom99
    • #3
    • 9th Jun 17, 11:03 AM
    • #3
    • 9th Jun 17, 11:03 AM
    Don't worry there is no chance of me DIYing this, I will be employing a solicitor. I just thought I would ask if anyone else has come across the same problem.
    • MichelleUK
    • By MichelleUK 9th Jun 17, 11:20 AM
    • 263 Posts
    • 167 Thanks
    MichelleUK
    • #4
    • 9th Jun 17, 11:20 AM
    • #4
    • 9th Jun 17, 11:20 AM
    Yes, it is possible but will the CGT tax on the 25% share be fully covered by the estates single CGT allowance?

    If not, it may be better to give 100% ownership to the beneficiaries but add a clause to the document that states that the beneficiaries agree that x will be deducted from their proceeds to cover the outstanding inheritance tax.
    • Tom99
    • By Tom99 9th Jun 17, 11:30 AM
    • 11 Posts
    • 2 Thanks
    Tom99
    • #5
    • 9th Jun 17, 11:30 AM
    • #5
    • 9th Jun 17, 11:30 AM
    Yes the single CGT allowance for the estate will cover the gain on the 25%
    • Tom99
    • By Tom99 13th Jun 17, 2:23 AM
    • 11 Posts
    • 2 Thanks
    Tom99
    • #6
    • 13th Jun 17, 2:23 AM
    • #6
    • 13th Jun 17, 2:23 AM
    MichelleUK - Thank you, do you have pointers to any legal website which confirm the question?
    My own solicitors want to spend five hours research taking three weeks at 235+VAT per hour to give me an answer.
    I can't believe I am the only person in the UK who has more than one beneficiary and an increase in value between probate and sale. It must surely be quite a common occurrence?
    • Yorkshireman99
    • By Yorkshireman99 13th Jun 17, 3:13 AM
    • 2,474 Posts
    • 1,984 Thanks
    Yorkshireman99
    • #7
    • 13th Jun 17, 3:13 AM
    • #7
    • 13th Jun 17, 3:13 AM
    MichelleUK - Thank you, do you have pointers to any legal website which confirm the question?
    My own solicitors want to spend five hours research taking three weeks at 235+VAT per hour to give me an answer.
    I can't believe I am the only person in the UK who has more than one beneficiary and an increase in value between probate and sale. It must surely be quite a common occurrence?
    Originally posted by Tom99
    Try asking another solicitor who is a STEP member for a quote.
    • getmore4less
    • By getmore4less 13th Jun 17, 7:39 AM
    • 28,782 Posts
    • 17,215 Thanks
    getmore4less
    • #8
    • 13th Jun 17, 7:39 AM
    • #8
    • 13th Jun 17, 7:39 AM
    Just ask HMRC or use an accountant(this is outside the scope of solicitor)

    This is a tax question to do with beneficial interests of a property held in a trust.

    If HMRC will allow the beneficial interest to be counted as belonging to the beneficiaries there will probably* be nothing to do other than a load of tax returns.


    it may depend on the exact wording of the will, if that is not sufficient then additional documentary evidence of the beneficial ownership transferring may be needed to satisfy HMRC for the purposes of CGT.

    those more knowledgeable about this hang out on the tax board.

    http://forums.moneysavingexpert.com/forumdisplay.php?f=22


    if you want to do some additional research to help understand what you are dealing with there is relevant information in this HMRC guide and loads of links to more information.
    https://www.gov.uk/government/publications/trusts-and-capital-gains-tax-hs294-self-assessment-helpsheet/hs294-trusts-and-capital-gains-tax-2015
    Last edited by getmore4less; 13-06-2017 at 8:06 AM.
    • Yorkshireman99
    • By Yorkshireman99 13th Jun 17, 9:10 AM
    • 2,474 Posts
    • 1,984 Thanks
    Yorkshireman99
    • #9
    • 13th Jun 17, 9:10 AM
    • #9
    • 13th Jun 17, 9:10 AM
    It is empahticly not a job to DIY. A good solicitor would refer the OP to a specialist solicitor or accountant.
    • getmore4less
    • By getmore4less 13th Jun 17, 8:36 PM
    • 28,782 Posts
    • 17,215 Thanks
    getmore4less
    MichelleUK - Thank you, do you have pointers to any legal website which confirm the question?
    My own solicitors want to spend five hours research taking three weeks at 235+VAT per hour to give me an answer.
    I can't believe I am the only person in the UK who has more than one beneficiary and an increase in value between probate and sale. It must surely be quite a common occurrence?
    Originally posted by Tom99
    The HMRC manual will get you up to speed to know if your chosen expert(s) have a clue.

    https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg30200c
    • Tom99
    • By Tom99 14th Jun 17, 4:34 AM
    • 11 Posts
    • 2 Thanks
    Tom99
    Thank you for all your replies.

    I will not be DIYing and am using a STEP solicitor.

    I understand the CGT side, effectively there will be eight tax returns, one for each beneficiary and one for the estate.

    It is the legal side which requires research, can I assent 80% to the beneficiaries leaving 20% in the estate. The STEP solicitor initially said the research would take a maximum of 2 hours however this has now changed to it could take 5 hours and I will have an answer in 3 weeks. This would be in addition to the cost of drawing up the assent itself.

    Taking into account the possible saving in CGT and the extra cost and hassle we have decided to take the easiest option of selling the property in the estate and paying the CGT.

    Once again thank you for your comments and links.
    • getmore4less
    • By getmore4less 14th Jun 17, 5:49 AM
    • 28,782 Posts
    • 17,215 Thanks
    getmore4less
    Depending on the will and/or when the residue was ascertained the beneficial ownership may have already transferred.

    if the sale is imminent it may be too late to back date any transfer anyway.
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