Estate owned by 3 unmarried brothers

pockitz

Hello,
My uncles live together and own a small holding where they live together. None of them are married and recently one of my Uncles passed away unexpectedly.
I wondered what happens to the estate after that? Does it automatically get distributed to the other two? Does it depend on the will? I have told by by mum that myself and my brother are in the will to receive the farm after they all pass away. I can't afford the inheritance tax so I was hoping someone can give me a bit of advice.
Thanks

nom_de_plume

Reading between the lines it sounds like there is a will in which case the Uncle's share will be dealt with according to that (assuming the small holding is not owned in such a way as to be dealt with outside of the estate).

It may be owned in such a way as that his share would automatically pass to his brothers.

Yorkshireman99

pockitz wrote: »

Hello,
My uncles live together and own a small holding where they live together. None of them are married and recently one of my Uncles passed away unexpectedly.
I wondered what happens to the estate after that? Does it automatically get distributed to the other two? Does it depend on the will? I have told by by mum that myself and my brother are in the will to receive the farm after they all pass away. I can't afford the inheritance tax so I was hoping someone can give me a bit of advice.
Thanks

I the deceased left a valid will then that will determine who inherits. Crucial though is the tenure that the farm is held i.e. joint tenants or tenants in common. If there is any IHT then the estate might have to be sold if there are no other assets. However, farms are not usually subject to IHT. You need get answer to the will contents and the tenure.

Linton

It depends on the details of how the ownership of the smallholding was set up and then on the will.

You as a beneficiary dont pay the inheritance tax - it comes out of the estate of the deceased. The contents of the estate cant be distributed until any tax due is paid.

Mojisola

pockitz wrote: »

My uncles live together and own a small holding where they live together. None of them are married and recently one of my Uncles passed away unexpectedly.

I have told by by mum that myself and my brother are in the will to receive the farm after they all pass away. I can't afford the inheritance tax so I was hoping someone can give me a bit of advice.

This - https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax - may be relevant to the small holding.

pockitz

Many thanks,
This is very helpful.

PasturesNew

I guess you're thinking that if each 1/3rd is worth, say, £150k, then as the first dies the others don't pay inheritance tax, then the second dies and his half is now £225k so the 3rd doesn't pay, but then the 3rd one dies and it's now worth £450k and you'd have to sell it or pay a big chunk of inheritance tax on £100k worth or so.

Whereas, if each of the 3 left you their 1/3rd in each of their wills there'd be no inheritance tax to pay as each estate'd be worth £150k.

Yorkshireman99

PasturesNew wrote: »

I guess you're thinking that if each 1/3rd is worth, say, £150k, then as the first dies the others don't pay inheritance tax, then the second dies and his half is now £225k so the 3rd doesn't pay, but then the 3rd one dies and it's now worth £450k and you'd have to sell it or pay a big chunk of inheritance tax on £100k worth or so.

Whereas, if each of the 3 left you their 1/3rd in each of their wills there'd be no inheritance tax to pay as each estate'd be worth £150k.

Farms are usually exempt from IHT.

calleyw

Yorkshireman99 wrote: »

Farms are usually exempt from IHT.

As you say usually but not always

To qualify it must met the following 3 criteria

• the land has to meet the inheritance tax definition of “agricultural property”
• the property must be occupied for agricultural purposes
• the land must be owned for at least two years if the owner farms the land or seven years if the land is let to someone else who farms it

And then it can either be 100% or 50% depending on the date of the tenancy and how quickly the land can be vacated.


And if the uncles are letting the land and not farming themselves then the house may not be exempt form IHT.


Yours


Calley