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  • FIRST POST
    • painted
    • By painted 1st Dec 17, 12:16 PM
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    painted
    Sister buying me out
    • #1
    • 1st Dec 17, 12:16 PM
    Sister buying me out 1st Dec 17 at 12:16 PM
    My mother died recently and left the house to my sister and myself. She wants to buy my share of the property. We have had it valued, settled on a price and everything seems to be going ok.
    The solicitors who sorted out some problems with the will, and land registry and who are also doing the conveyancing, are now saying they cannot act for me too.

    They can act for both of us as beneficiaries, but not for the transfer of the house into my sisters sole name. I can go down the road of not employing a solicitor for my bit, but what would I need to be aware of please? Are there any pitfalls?
Page 2
    • painted
    • By painted 2nd Dec 17, 4:03 PM
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    painted
    Sorry, what is a life interest please?
    • getmore4less
    • By getmore4less 2nd Dec 17, 4:06 PM
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    getmore4less
    Sorry, what is a life interest please?
    Originally posted by painted
    Did fathers will say mum could live there till she died?
    • painted
    • By painted 2nd Dec 17, 4:10 PM
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    painted
    Yes, it states rent free but paying bills and upkeep.
    • getmore4less
    • By getmore4less 2nd Dec 17, 4:23 PM
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    getmore4less
    Who were the trustees of the trust set up by you fathers will

    It will most likely be an qualifying interest in possession trust.

    Who were executors of the fathers will?
    Did it go to probate?


    If it did loss of the will should not be relevent as there is a public record copy.
    • getmore4less
    • By getmore4less 2nd Dec 17, 4:30 PM
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    getmore4less
    OK, your original question asks for "pitfalls" so your additional info does open up a few extra issues ...

    - you inherited 25% of the property when father died "sometime ago"
    - you are now inheriting the other 25% from mother.
    - your sister has the same pattern of 25 & 25

    Have you personally lived in the property as your only/main home since father died and you became a legal co-owner with your mother?
    If not, then your "disposal" of your 50% share to your sister is subject to capital gains tax since at least half of your 50% share relates to a property which is not exempt from CGT as you have been its owner since father's death sometime ago

    You and sister have agreed a valuation. It appears that valuation is based on having had 3 independent valuations undertaken and therefore it can be used as the market value which is the figure required for CGT purposes when there is a disposal between siblings.
    Originally posted by 00ec25
    Looks like a qualifying interest in possession trust was set up the tax position changes as the did not inherit the share of the house.
    • painted
    • By painted 2nd Dec 17, 4:32 PM
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    painted
    My mother, sister and I. My sister was executor and no it didnt go to probate.
    • painted
    • By painted 2nd Dec 17, 4:34 PM
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    painted
    So how does that affect the amount of tax
    • getmore4less
    • By getmore4less 2nd Dec 17, 4:48 PM
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    getmore4less
    This should not be a big deal,
    Simplified
    The three of you were trustees of you fathers share for mum to live in.
    (legal ownership should have changed but should not be a problem)

    Interest in possession for tax purposes its like you mum inherits.

    Mum dies trust finishes you get your shares along with mums shares to you.

    Land reg should be happy with death cert of dad and probate for mum
    • painted
    • By painted 2nd Dec 17, 4:50 PM
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    painted
    So the Capital Gains Tax will be the same as if I had just inherited 50% now?
    • getmore4less
    • By getmore4less 2nd Dec 17, 4:59 PM
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    getmore4less
    So the Capital Gains Tax will be the same as if I had just inherited 50% now?
    Originally posted by painted
    No CGT on you inheriting and base value should become that at DOD of mother.

    CGT is when you dispose(to sister)
    • painted
    • By painted 2nd Dec 17, 5:03 PM
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    painted
    Sorry, I dont quite understand. I will owe Capital Gains Tax for the amount I receive now? Not going back to the date my Father died?
    • 00ec25
    • By 00ec25 2nd Dec 17, 6:43 PM
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    00ec25
    Sorry, I dont quite understand. I will owe Capital Gains Tax for the amount I receive now? Not going back to the date my Father died?
    Originally posted by painted
    where there was an interest in possession trust in vastly simplified terms it is as though your father's share had in fact passed to your mother. She then continues as the life interest. When mother then dies , again vastly simplified, it as as though she is then passing the whole property to you at that point in time, so you inherit it at the date of mother;s death, not the date of father's death.

    as such the CGT clock only starts ticking when mother dies. In technical terms the trustees acquire the property at its then market value and you and sister will only become liable to CGT from the date the trustees transfer the legal ownership of the property into your and sister's names.

    it very much sounds like either you and/or your sister don't really understand what is going on and the legal implications of what is and has been done. Is there anything else you have missed out? Can't you get the solicitors to sit down and explain things to you & sister .... for example, probate must be obtained! There is a property involved, "you" cannot change the legal ownership without probate having been granted.
    Last edited by 00ec25; 02-12-2017 at 8:31 PM.
    • getmore4less
    • By getmore4less 2nd Dec 17, 7:14 PM
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    getmore4less
    does your sister as executor of your dads will understand what is going on?

    remember people here are basing things on what you say and you may still be missing significant facts
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