Stamp duty and amending a Will

LittleJohn

The situation is as follows… If there was a business partnership between two partners, and one partner dies. The surviving business partner is a beneficiary of the Will and is left a 25% share. He already owns 50%. Probate needs to be obtained and inheritance tax will be payable.


The surviving partner would like to buy the other 25% of the property. Cash would be passed over to the other beneficiary as the remaining 25% share.


I understand that stamp duty would be payable on the transaction, is that correct? Would stamp duty be only payable on the 25% valuation?


I have read that a Will can be amended after a death to reduce such payments being made is that correct? Does it matter when this amendment is made, before or after Probate?


Any other suggestions welcome.


Thank you for reading.

Savvy_Sue

LittleJohn wrote: »

I have read that a Will can be amended after a death to reduce such payments being made is that correct? Does it matter when this amendment is made, before or after Probate?

What you're after is a Deed of Variation, which - if all affected beneficiaries agree - effectively re-writes the will to do something different. However I'm not sure if it can 'work' in this situation, unless there are assets other than 25% of a business which the beneficiary who wants to sell can be 'left' instead.

I'd strongly recommend getting professional advice on this, possibly from a STEP qualified accountant. A first step would be the business's accountant, if there is one. You are raising a number of different questions, and there might be knock on effects, eg since IHT is due, then taking action to reduce that might lead to an increase in CGT at a later date. Stamp duty I know next to nothing about ...

getmore4less

what numbers are we looking at?

Stamp duty is based on consideration so the money for the 25%.

Is the business just a "property" or is there other value.

If there is a spouse?

LittleJohn

Hi thank you both for your replies.

No spouse, she died late last year. IHT allowance will be 650k.

The estate is to be divided into two equal parts.

Four properties - 50% value is around 600k, plus cash of 450k.

I would need to take a mortgage to make up any difference.

I will need to take professional advice but it's good to have some background knowledge yourself

Thank you

Savvy_Sue

LittleJohn wrote: »

Four properties - 50% value is around 600k, plus cash of 450k.

Ah, so is this letting properties? And you're the surviving partner?

That valuation is a shame, because the little I think I know about Stamp Duty is that there's one rate for properties sold for under £250,000, and another MUCH higher rate for properties sold for over £250,000. And don't think you could part buy now and part buy the rest later - it becomes a 'linked transaction' and you get stung for the higher amount anyway.