inherited 2 homes, stamp duty question

millystar

Apologies for the mixed up and long complicated post in advance but I was hoping that someone could help me to make light of the very confusing situation that I am in, and help me understand Stamp Duty under these circumstances.

November 2015 - my mother passed away, 12 years after my father. As she had no other children I inherited her modest home, however have not yet gotten around to claiming probate. I moved into her home shortly afterwards with her partner of 10 years along with my husband and daughter.

November 2016 - my aunty passed away, she named me as the beneficiary to her entire estate in her will, including her large countryside home. Because of this I am now going through the process of claiming probate and will end up selling this property due to the location and the intention to purchase another property.

Because of my aunties estate and claiming probate on this, I will therefore claim the probate for my mums house so that legally I will be the owner of her home.

Once I have sold my aunties property I am planning on purchasing a property locally for my family and I to move into, upfront, and intend on keeping my mothers house also, and would leave my mums partner living there on the provision that he simply pays the bills and looks after the place day to day. He was a rock when my mother died and I would not feel comfortable leaving him homeless.

My question therein lies in the second property I intend on purchasing, as my mothers home will be signed over to myself through probate. The house that I purchase would be worth more than the house I intend to leave with my mum's partner in. Would I be liable for Stamp Duty and would this be the full amount. I have tried to research online however cannot find anything where people find themselves in similar circumstances. Any help or advice would be greatly appreciated. Thanks xx

kinger101

You already own one property, and intend to purchase another. Therefore, you'll have to pay the higher SDLT. They are certain exemptions for people who've inherited property, but they require that you (and your spouse) own no more than 50% of that property, and it was inherited in the last three years since the purchase date in question. You'll own 100% of the first property, so that wouldn't apply here.

millystar

brilliant thank you - so it's simply treated as purchasing a 'second home' so to speak and as such is liable to the stamp duty I can find on the gov website? If so thank you very much for your help! x

booksurr

millystar wrote: »

brilliant thank you - so it's simply treated as purchasing a 'second home' so to speak and as such is liable to the stamp duty I can find on the gov website? If so thank you very much for your help! x

it is liable to the higher rate SDLT if that is what you mean and that is 3% on top of the "normal" rate

getmore4less

as you plan to keep the house your mothers partner lives in what will happen after that.

You still have time(Nov 17) to do a deed of variation on that house.

You could look at giving the partner life interest in the property(which you are effectively doing anyway) with it passing back to you or someone else when the partner passes.

You then don't own a second property.


also avoids the issue of you effectively becoming a landlord with all that hassle.

Also gets round the CGT issue on that house but does have an impact on the partners IHT as it becomes part of his taxable estate

G_M

Having recently gone through Probate (DIY) for my mother, and in the process executed both a Deed of Variation to the will, and a Deed of Assent on the sale of the property, I can 2nd getmore4less's suggestion above, but would advise instructing a solicitor for this.

You can still do the rest of the probate work yourself (unless you're already using a solicitor), but

a) getting the deeds right is important and
b) associated advice can be useful to ensure the deed is appropriate to your precise circumstances and covers all bases.

getmore4less

G_M wrote: »

Having recently gone through Probate (DIY) for my mother, and in the process executed both a Deed of Variation to the will, and a Deed of Assent on the sale of the property, I can 2nd getmore4less's suggestion above, but would advise instructing a solicitor for this.

You can still do the rest of the probate work yourself (unless you're already using a solicitor), but

a) getting the deeds right is important and
b) associated advice can be useful to ensure the deed is appropriate to your precise circumstances and covers all bases.

Certainly needs a lot more thought and advice on what the options are.

Depending on the size of the estates there may be scope for further IHT planning.

Another thing to consider is the status of the partner and the scope of any interest they have in the property
eg. should they move out or want to move someone in.