Wills, Probate, Inheritance Question

Steve_Street

I hope I have put this in the correct forum.
I'd appreciate some advice.
My grandmother has passed away leaving a house.
Her will names me as sole executor.
Her estate is to be divided equally between my brother and myself.
The house has been valued at £530k for probate. (3 estate agents valued between £500k and £550k)

We have no inheritance tax to pay as we have a double threshold.

By brother has made it clear that he wants his half of the estate in cash as soon as possible.
I'm in no rush as probate could take 6 months.

So my question is this:-

He has recently got his own valuation and they led him to believe that they could sell the house for £600k. So he wants £300k.

I personally don't want to sell the house as It has been our family home for generations. Our great grandfather bought the plot and had the house built, laid the first stone etc. I would like to keep the house in the family. We could rent it out and draw a regular income from it, or another option would be me and my family moving in and living there. If I did this I would give my brother half the value.

So...Would I need to give him half the probate value, or the higher latest value?

Can he force the sale of the house? Does he have any say in what happens to the estate, ? Or is it entirely up to me what I do with it, obviously providing that he gets half?

chris_m

Steve_Street wrote: »

So...Would I need to give him half the probate value, or the higher latest value?

IMO, you should seek to reach an agreed value between the two of you, then give him half of that, less half of the costs incurred in doing whichever transaction (sell the house, you buy him out or whatever) you choose, not forgetting any other admin costs in winding up the estate.

That's what we did with Dad's bungalow, my sister wanted to buy my half so we got three EA valuations and agreed on the average of them. We were joint executors but I did all the work on getting probate, having more time available than she did.

Obviously, how you do it will depend on how good your relationship with your brother is - the only problem with our case was that my sister kept trying to take less than her 50% "because you've done all the work". She didn't succeed, it got split 50:50 to the penny

jimmy_cricket

Sorry for your loss.

Having gone through a bereavement recently and sorting out the estate, I don't think you can start to distribute the estate until you have been granted probate. This should give you some breathing room.

Have you also thought about the new stamp duty rules on second homes? Some else will be along to advise and correct me if I'm wrong here, but I understand that if you already own your own property, then the money you pay to sibling for their half of the property will be subject to the 3%.

G_M

You cannot do anything till the Grant of Probate is issued.

If you want to keep the property in the family but your brother wants his inheritance, then you will need to buy him out.

Let's assume that HMRC have accepted the value you placed on the property. (They might pass it to the District Valuation Oficer to check before they authorise the Grant of Probate.)

* Get the property revalued
* pay any Capital Gains Tax on the difference between the Probate value and the updated value (or hold that amount to pay at year end)
* pay your brother 50% of the updated valuation (less CGT and any other costs etc
* transfer the property into your sole name

Alternatively, sell the property. As above CGT might be due on any increase in value since Probate value. After allowing for this, estate agent/legal fees etc, split the sale price 50/50.

Your brother cannot dictate the amount he receives. the will says:

Her estate is to be divided equally between my brother and myself.

so he gets half of whatever the Estate comprises. Since property prices change, this might or might not be the same as the probate value declared to HMRC, and of course all costs come out of the Estate before it is splt and distributed.

Keep careful accounts of what you spend as Executer (eg insuring the property etc). These costs come out of the Estate, not your pocket.

AdrianC

It's simpler if you sell it - you each receive half of the balance of the sale price, after costs.

If you want to keep it, then you need to negotiate a price you both agree on, and give him half of that, after any costs. How you finance that is entirely up to you.

He can't force anything - but the executor mustn't delay the process unnecessarily.

Norman_Castle

Would I need to give him half the probate value, or the higher latest value?

The probate value, which as executor you need to show is the correct value especially if you intend buy the property.

https://www.gov.uk/valuing-estate-of-someone-who-died/assets

Penelope_Penguin

Sorry for your loss, SS. As an aside, have you and your brother been left just the house, or is there any other inheritance?

jimmy_cricket wrote: »

Have you also thought about the new stamp duty rules on second homes? Some else will be along to advise and correct me if I'm wrong here, but I understand that if you already own your own property, then the money you pay to sibling for their half of the property will be subject to the 3%.

Not quite true. OP may well have to pay a 3% stamp duty premium. However, if they then sell their family home, within 18 months (I think, though this needs checking) they can apply to have this premium repaid to them.

googler

Get a local RICS surveyor to place a value on it for probate purposes. This is more likely to be acceptable for legal purposes than EA valuations.

G_M

googler wrote: »

Get a local RICS surveyor to place a value on it for probate purposes. This is more likely to be acceptable for legal purposes than EA valuations.

I used an average of 3 EA valuations for my late mother's house last year.

HMRC did not know how I reached the figure (the form IHT400 does not require one to specify and they did not ask).

Apparantly they did however refer it to the District Valuer, who confirmed my valuation was fair.

p00hsticks

Steve_Street wrote: »

I hope I have put this in the correct forum.
I'd appreciate some advice.

Just, FYI, there is a separate 'Death, wills and Probate' board here http://forums.moneysavingexpert.com/forumdisplay.php?f=217

although as your question is all about property this board is as good a place as any

AnotherJoe

Perhaps another way of getting a true valuation is to put it up for sale ?

Advertise it (when you can which may be months away) at £600k and see how many takers you get. To play devils advocate, if you find a buyer at that price, your brother is correct, you would have been depriving him of £35k and enriching yourself by that much.

But, with no takers, he'll find it much more difficult to make any kind of a case that your valuation was incorrect.