Stamp duty - moving into jointly inherited property

ferger

Not clear on what the position is, or whether there are options to minimise the impact... but, essentially

My sister and I have inherited a house + investments etc from my father - the entire estate split 50/50. I am considering the possibility of moving into the house. What I'm not clear on is where stamp duty may be due. Clearly, we would get the house approriately valued and I would buy out my sister's half - so is stamp duty due on the other 50%?

Thanks!

G6JNS

ferger wrote: »

Not clear on what the position is, or whether there are options to minimise the impact... but, essentially

My sister and I have inherited a house + investments etc from my father - the entire estate split 50/50. I am considering the possibility of moving into the house. What I'm not clear on is where stamp duty may be due. Clearly, we would get the house approriately valued and I would buy out my sister's half - so is stamp duty due on the other 50%?

Thanks!

Can't help on the SD aspect but don't get caught in the trap of the house being valued too low for probate and the seller of half getting clobbered with CGT.

SeniorSam

THis may help you http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/5-things-you-need-to-know-about-stamp-duty/

nom_de_plume

ferger wrote: »

My sister and I have inherited a house + investments etc from my father - the entire estate split 50/50.

Can we assume the 50% share is over the stamp duty threshold? If so then yes stamp duty appears payable.
https://www.gov.uk/sdlt-transferring-ownership-of-land-or-property

There may be legitimate ways around it though. If the value of the investments are sufficiently high you could split the estate 50:50 by value rather than by each item with you taking your share solely as a bigger part of the house. You may need to consider a deed of variation depending on the wording of the will and this is just me thinking out loud.....

Mojisola

nom_de_plume wrote: »

There may be legitimate ways around it though. If the value of the investments are sufficiently high you could split the estate 50:50 by value rather than by each item with you taking your share solely as a bigger part of the house. You may need to consider a deed of variation depending on the wording of the will and this is just me thinking out loud.....

A neighbour did this. One sibling had lived in the house with the parent and wanted to continue living there.

There was enough in the estate for one to take most of the money and the other to take the whole house.

A lot simpler than having to buy the sibling out after the estate was distributed.

ferger

Yes, I had thought about deed of variation. No question the 50% share is due stamp-duty - and I'm waiting for HMRC to accept the probate valuation, but I'd rather pay 28% CGT on any gain, rather than 40% IHT :-) The question is.... can we legitimately do a DoV to split the estate in that way, when the only (and obvious) reason to do so is to avoid the stamp duty? It seems unlikely... but if we can do that, well, great!

getmore4less

DOV are about saving tax, thats their only purpose

If the estate is 50:50 then there may not be a need for one as you can get the house the sis gets the rest and you pay just pay the difference that would be the consideration for the property aquisition(do check that is allowable).

G6JNS

ferger wrote: »

Yes, I had thought about deed of variation. No question the 50% share is due stamp-duty - and I'm waiting for HMRC to accept the probate valuation, but I'd rather pay 28% CGT on any gain, rather than 40% IHT :-) The question is.... can we legitimately do a DoV to split the estate in that way, when the only (and obvious) reason to do so is to avoid the stamp duty? It seems unlikely... but if we can do that, well, great!

CGT is only an issue if the house is undervalued for probate. If that is done HMR&C might come back and ask for more IHT. I am aware of a case where they did and it caused the culprit a lot of difficulty.

ferger

Well, the house is unlikely to be sold before the end of the year, 12 months after my father's death. With house prices moving at 10% locally, there likely to be a CGT liability arising from the gain... unless I am misunderstanding something