Siblings inherit house - how to buy the others out?

Mustang

My 2 siblings and I have inherited a house and some cash. We are all executors of the will.

The house is about the same value as the cash. We've all agreed the value of the house.

We've also agreed that I will take the house and compensate my siblings enough so that everyone has an equal final share.

I am trying to understand what the process is to sort out the house. Is it simply a matter of registering it in my name and I pay cash to the others, or is it something more complicated?

holly_hobby

If there is no mortgage reqd, and your agreed payment to siblings is from your own capital/inheritance, then yes you simply record the details of the sale (for clarity and any audit purpose), and have the house tsfd into your sole name as part of the estate administration process (you may do this yourself with relevant LR form TR1 & additions).

Your probate solicitor wil guide you - but here is a link to land registy on the subject http://www.landregistry.gov.uk/public/faqs/how-do-i-transfer-my-registered-landproperty (there is also a land registry rep who bounces around the forum, so they may pop in on their travels !).

Hope this helps

Holly

xylophone

Have a solicitor handle the conveyance and draw up any necessary formal agreement and check what information needs to be provided to HMRC?

holly_hobby

No SDLT in respect of your inherited share (as tsf of ownership on inheritance is not a chargeable transaction).

However, even though on the face this, it is a sole tsf of ownership under inheritance, as you will have effectively purchased for cash (consideration) the (legal) and beneficial ownership rights from your 2 siblings to facilitate this tsf, I am pretty sure there will be SDLT in respect of the pch of their beneficial ownership.

If so, and if the consideration (payment) to siblings, exceeds nil rate SDLT threshold of 125k there will be SDLT at 1% for pch price upto 250k (3 % 250k to 500k).

You could avoid this if your pch exceeds the above (and within 2 yrs of the donor's death) by having the will varied under a Deed of Variation. Whereby you could for example (and with the agreement of fellow beneficiaries), alter the terms of the current will re distribution of property and capital, from the present inheritance of 3 equal shares of both assets, to you solely inheriting the property (with no capital or to whats left of your share, after effectively paying siblings off) with your siblings inheriting the adjusted capital between them (with no property share).

Hope that makes sense....

Your probate solicitor will advise and guide on both any Deed of Variation and tsf of property with Land Reg.

Hope this helps

Holly

thelem

If the house is worth the same as the total cash in the estate, then you should be expecting to pay each of your siblings a sum equal to one third of the cash in the estate, while receiving no cash from the estate yourself. Think of the estate as six sixths, you keep two (both property), and you buy another one from your sibling.

You should have already been advised all this by your lawyers - why haven't you? If you're trying to do the sale and probate yourself based on opinions on an internet forum then that's a very bad idea as you can't trust anything we say. Otherwise your lawyer isn't doing what you pay them for.

zzzLazyDaisy

At the risk of stating the obvious.... you do know that since property is involved, you must get probate in order to deal with the estate and transfer the property?

I agree that a deed of variation is probably the way to go.

Perelandra

thelem wrote: »

If the house is worth the same as the total cash in the estate, then you should be expecting to pay each of your siblings a sum equal to one third of the cash in the estate, while receiving no cash from the estate yourself. Think of the estate as six sixths, you keep two (both property), and you buy another one from your sibling.

I don't understand why the OP would pay each of the siblings a sum equal to a third of the cash in the estate.

The OP should add a sum equal to one third of the cash in the estate to the "pot", and take the house. The other two siblings then share the entire pot equally between the two of them.

Example: House worth 90k; cash of 90k.

OP adds 30k to the pot and takes the house (net: 60k).
OP's siblings share the new 120k between them (60k each).

thelem

Perelandra wrote: »

I don't understand why the OP would pay each of the siblings a sum equal to a third of the cash in the estate.

Sorry, you're correct. I think in my earlier calculations I was forgetting that the OP is entitled to 1/3 of the cash, which cancels out one of the payments to the siblings.

Land_Registry

The executors can transfer the house to you by completing the relevant paperwork and paying the correct fee. The forms you need to complete will depend on whether the property is registered or not. See FAQ How do I find out who owns a property of piece of land? http://www.landregistry.gov.uk/public/faqs/how-do-i-find-out-who-owns-a-property-or-piece-of-land
Thank you hollyhobby for providing the link to “How do I transfer my registered land or property?” http://www.landregistry.gov.uk/public/faqs/how-do-i-transfer-my-registered-landproperty It does give details of the forms and how fill them in, but you will also need to send us:
· the original or official copy of the grant of probate or letters of administration, which we will return to you.
If it is not registered, the change of ownership means that you will have to
register the house with us for the first time. See FAQ How do I register my property?
http://www.landregistry.gov.uk/public/faqs/how-do-i-register-my-property
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