Sale of house in probate to family

monkeysrevenge

Hi all,

Sorry if this question has been answered elsewhere. I did a search, but unfortunately "family", "private", "selling house" and "probate" are quite common terms on this forum!!

My mother died a few weeks ago and left her estate to me, my brother and sister in equal thirds. We all get along extremely well and I doubt there will be any disagreement about the distribution of the estate.

My query is over my mum's house, which is the largest single asset held in the estate. It is valued around £100k (we have not yet had a formal valuation) and around 5 years ago, my uncle paid off the remaining mortgage for my mum with proceeds of his private pension plan, as mum was struggling financially.

With this, him and mum signed a trust deed that he has a 49% interest in the property, however nothing was done at Land Registry to formalise this on the title register. It was done in the presence of a solicitor and none of us are challenging the authenticity of the document.

My uncle has now expressed an interest in purchasing the other 51% of the house from her estate, and has the means to do so. This is both to have as a "nest egg" and also to help settle the estate in a timely manner.

Mum's estate, after credit car bills and funeral costs, won't be huge (c. £25k) and we are reluctant to appoint a solicitor in the matters due to the costs involved and apparent simplicity of it all.

My godmother is executor, and there is a "gentleman's agreement" (for want of a better phrase) between me, my brother, my sister and my uncle that he can purchase the share in order to inject cash into the estate, costs/expenses be paid and the residual estate divided up.

My question is this; as long as we agree a fair market value (not just "mate's rates") for the remaining 51% between us, is there anything stopping us selling the property privately to my uncle and the executor doing the registration directly with Land Registry, as long as the Grant of Probate has been granted?

It will save a huge amount of fees and there won't be any kind of charge on the property, but we want to ensure that there won't be any legal issues around the transfer/sale if done this way.

Thanks everyone in advance.

Brighty

Someone more in the know will be along to tell me i'm wrong, but, the executor doesn't need to do anything with regards to registering the property, that will be done by your uncles conveyancing solicitor as part of the sale, registering it in his sole name. Probably the easiest thing to do is for the executor to contact their own conveyancing solicitor to sell the house, set sale price at £51k or whatever 51% of value ends up as, so lo g as you and your siblings agree, then carry out a straight forward under value sale to uncle. A £100k house/estate has no inheritance tax or stamp duty to pay, so HMRC won't care. Maybe. That seems the most logical way forward to me.

Savvy_Sue

monkeysrevenge wrote: »

My question is this; as long as we agree a fair market value (not just "mate's rates") for the remaining 51% between us, is there anything stopping us selling the property privately to my uncle and the executor doing the registration directly with Land Registry, as long as the Grant of Probate has been granted?

It will save a huge amount of fees and there won't be any kind of charge on the property, but we want to ensure that there won't be any legal issues around the transfer/sale if done this way.

Can't think of any reason why you shouldn't do this. However, note that the executor can consult a solicitor (or other professional) about particular aspects of dealing with the estate if she'd find that helpful - it's not an 'all or nothing' situation.

Yorkshireman99

Things to consider.

Is the trust deed properly executed and legally binding? The executor's need to be sure of this before proceeding.

Did the value at the date of the deed accurately reflect the amount of the money lent including interest?

To be fair to all parties you need a paid for professional valuation at the date of death by RICS or similarly qualified surveyor.

Your uncle needs to be aware of the CGT position.

Keep_pedalling

Providing, the trust deed was properly executed, it does not really how much was paid for the 49% share as the deceased was free to sell that portion for what ever price she wished at the time.

The uncle only needs to worry about CGT if he ever decides to sell the property.

The proposed solution sounds like it is the best way to wind up the estate.

Land_Registry

I'm assuming from your OP that the property is registered and was in your late Mother's sole name. And that it is in England or Wales, which is the area we register.

If so then your mother was the sole legal owner and in order to deal with the property probate will be required - you already appreciate that of course.

Probate will allow the personal representative to deal with the property so if that means selling it to your Uncle then there is no need to change the register before doing so as others have mentioned.

Our online guidance explains how to transfer the ownership.

If your Uncle is using a conveyancer then they would submit the application so they would need an official copy of the probate and a Transfer executed by the personal rep(s)

Issues around CGT and what % would be a fair price etc would not be something we could advise on. As such we would always recommend that legal/financial advice is taken to ensure that the amicable arrangements prevail after the sale and that each party understands what is happening and why

Yorkshireman99

Keep_pedalling wrote: »

Providing, the trust deed was properly executed, it does not really how much was paid for the 49% share as the deceased was free to sell that portion for what ever price she wished at the time.

The uncle only needs to worry about CGT if he ever decides to sell the property.

The proposed solution sounds like it is the best way to wind up the estate.

The executors need to be completely sure that the deed is valid and the value is reasonable. If the value was not appropriate then the possibility of undue influence may need to be considered.

monkeysrevenge

Thanks for the replies and sorry for the delay in responding (funeral etc. to deal with).

The intention is simply to transfer the house at land registry from my mother to my uncle, by use of form AP1(?) following transfer of funds into the executor's account.

We have all the necessary reports from the last time the property was sold (coal reports, flood risk etc.) and my uncle is happy to proceed without a conveyancer. I presume there is no legal problem in doing this ourselves direct at LR when there isn't a mortgage involved?

The trust deed has been properly executed at a local solicitors, and is legally binding.

We have now had 3 valuations by local estate agents and our intention is to sell slightly below the average market price, in order to avoid CGT issues.

securityguy

Yorkshireman99 wrote: »

The executors need to be completely sure that the deed is valid and the value is reasonable. If the value was not appropriate then the possibility of undue influence may need to be considered.

Why? The beneficiaries are the only people who can bring such an action, excluding wild and implausible scenarios involving a subsequent benefit claim being disallowed because of potential deprivation of asset claims based on the theory that a will you received a legacy from might have been challengeable in the opinion of the decision maker. If the sole beneficiaries of a will agree with the executors, who are probably themselves anyway, to a particular transaction, who else has any locus to raise a challenge?

Yorkshireman99

securityguy wrote: »

Why? The beneficiaries are the only people who can bring such an action, excluding wild and implausible scenarios involving a subsequent benefit claim being disallowed because of potential deprivation of asset claims based on the theory that a will you received a legacy from might have been challengeable in the opinion of the decision maker. If the sole beneficiaries of a will agree with the executors, who are probably themselves anyway, to a particular transaction, who else has any locus to raise a challenge?

The excecutors do what your bad advice says at their own risk.

getmore4less

monkeysrevenge wrote: »

We have now had 3 valuations by local estate agents and our intention is to sell slightly below the average market price, in order to avoid CGT issues.

What CGT issue?

The buyer has none(yet)
Estates don't pay CGT on DOD values even if just prior to death sale would have resulted in CGT.