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Inherited house, now sold but...
Retro82
Posts: 97 Forumite
Hey all!
My sister and I inherited a house from my Grandma when she passed away.
We had always planned to sell and the solicitors handling probate knew this. Whe probate came through I began tghe process of selling and accepted an offer.
Now, all the legal stuff for selling has come to my father as he is the executor.
The solicitors say that, as executor, my father can handle the sale and just say where he wants the money to go. But will that money still count as the sale of our property? I'm thinking about tax problems obviously. That money would be untaxable if it was us selling our house but is the tax man going to just see this as a sale made by her estate and a subsequent cash gift to us?
My sister and I inherited a house from my Grandma when she passed away.
We had always planned to sell and the solicitors handling probate knew this. Whe probate came through I began tghe process of selling and accepted an offer.
Now, all the legal stuff for selling has come to my father as he is the executor.
The solicitors say that, as executor, my father can handle the sale and just say where he wants the money to go. But will that money still count as the sale of our property? I'm thinking about tax problems obviously. That money would be untaxable if it was us selling our house but is the tax man going to just see this as a sale made by her estate and a subsequent cash gift to us?
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Comments
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What does the will say? Me and sis inherit the house jointly or me and sis inherit the money from the sale of the house?
If the first, the executor can transfer the house to you and the sister, as directed by the will. This requires him to complete some Land Regsitry forms and nothing more than that. No need for solicitor's fees. Then you and sister sell the house.
You need to check the Capital Gains Tax implications of any price increase between the transfer and sale.If you've have not made a mistake, you've made nothing0 -
I am sure someone will come on with better knowledge but take it you are referring the CGT exemption as it is your main residence - have you ever lived in property?0
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What does the will say? Me and sis inherit the house jointly or me and sis inherit the money from the sale of the house?
If the first, the executor can transfer the house to you and the sister, as directed by the will. This requires him to complete some Land Regsitry forms and nothing more than that. No need for solicitor's fees. Then you and sister sell the house.
You need to check the Capital Gains Tax implications of any price increase between the transfer and sale.
It says we inherit the house. The solicitors didn't see any need to change the deed to our name to make the sale but I guess they might not be thinking about our taxes?0 -
It says we inherit the house.
In which case the executor needs to transfer the property to you and sis as instructed by the will, pronto. Go to the Land Registry web-site and download the paperwork if you want to speed things up.If you've have not made a mistake, you've made nothing0 -
In which case the executor needs to transfer the property to you and sis as instructed by the will, pronto. Go to the Land Registry web-site and download the paperwork if you want to speed things up.
They seemed to think the new deed could be trasfered directly to the buyer, with the funds then directed to my sister and me.0 -
What taxes are you referring to? Inheritance tax? Capital Gains tax? What difference do you think it makes if the deeds are transferred from your late grandmother's name to your name to the buyer's name?
Are both you and your sister over 18?0 -
It is perfectly legal, and certainly simpler, for the Executer to sell the property and pass the proceeds to the Beneficiaries.
Or the Executer could register the property in the Beneficiaries names (with associated costs and time delay), and the Beneficiaries could sell (more cost/time).
Capital Gains Tax is unlikely to be relevant whichever way you do it, given the timescale - any minimal increase in value between inheriting and selling will be within the annual CGT allowance. Unless either
1) the property is VERY high value and in a booming market area, OR
2) the Beneficiaries have already used their annual allowance on other capital gains elsewhere.
Inheritance Tax will be unaffected either way. The value of the property will be included within the Estate for IT purposes either way, and IT will be chargeable in the normal way.0 -
It is perfectly legal, and certainly simpler, for the Executer to sell the property and pass the proceeds to the Beneficiaries.
Or the Executer could register the property in the Beneficiaries names (with associated costs and time delay), and the Beneficiaries could sell (more cost/time).
Capital Gains Tax is unlikely to be relevant whichever way you do it, given the timescale - any minimal increase in value between inheriting and selling will be within the annual CGT allowance. Unless either
1) the property is VERY high value and in a booming market area, OR
2) the Beneficiaries have already used their annual allowance on other capital gains elsewhere.
Inheritance Tax will be unaffected either way. The value of the property will be included within the Estate for IT purposes either way, and IT will be chargeable in the normal way.
Perfect answer, thank you. And thank you everyone else for your help!0
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