Sale of beneficiary interest??

akman786

Hi, I would like some help please!

I am the administrator of my late father's estate. He died intestate. My sister and I are the only beneficiaries. At the time of filing probate, I had valued the property at £240,000. I have recently put the property on the market for sale - the estate agent valued it at £310,000. My sister has offered to buy my 50% share at market value i.e. £155,000. I'm currently living in the property.

I would like to know what will be the conveyancing procedure - using TR1 or AS1? Also, will I need to execute a deed of assignment for my beneficial share in the property? Will the transfer attract CGT - if so, will I be eligible for Private Residence Relief?

Finally, if I receive a similar or higher offer from another buyer - can I refuse to sell my share to her and instead sell the whole property as the administrator of the estate? Will she have a right of first refusal?

I know that's a lot of questions - but any guidance on the above would be greatly appreciated.

Thanks

Yorkshireman99

You need some paid for professional advice on the CGT issues. A good RICS qualified surveyor should be able to help. How long ago was the death? Did you get the house professionally valued for probate? Has anyone been living in the house since the death? All of these could affect the CGT liability of the estate or yourself.

da_rule

Assuming that there was enough cash in the estate to pay the bills and that the property is registered at the Land Registry.

You have a few options:
1) Use forms AS1 and AP1 accompanied by the probate document to transfer the property to you and your sister in equal share
2) Use the same forms as above to transfer the property solely to your sister
3) Sell the property on the open market - it would be advisable to do option 1 before putting it on the market but this can be done as part of the conveyancing process

In terms of first refusal then no you don't have to. Obviously this is a decision for you as administrator (and depending on the relationship you have with your sister).

The deed of assignment is the AS1. If the property isn't registered then you'd use the same forms as above accompanied by a FR1 and all of the deeds for the property as transferring ownership under probable is one of the triggers for compulsory first registration.

There may be CGT to pay based on the value of the property when you transfer it minus the value at the date of death.

getmore4less

be careful transferring the property into your names is selling on.
Anyone needing a mortgage could hit a problem with less than 6 months ownership by you.

Do you own another property that was your main residence?
Have you been using this one as your main residence?

Was the probate value ascertained.

SDLT will kick in and if sis has another property the extra 3% could also kick in.

akman786

Thank you all for your replies. Please see below for more clarifications:

Yorkshireman99 wrote: »

You need some paid for professional advice on the CGT issues. A good RICS qualified surveyor should be able to help. How long ago was the death? Did you get the house professionally valued for probate? Has anyone been living in the house since the death? All of these could affect the CGT liability of the estate or yourself.

@Yorkshireman99,

• the date of death was 5 March 2015
• No I did not get the property professionally valued for probate. I made an estimate based on a few estate agent valuations when I filled out the probate forms.
• I had been living in the property before my father's death and have been living there since. My sister's son who is studying for a course came to live in the house from Oct 2015 to Sep 2016. He has now moved out. Sister lives abroad.

.

da_rule wrote: »

Assuming that there was enough cash in the estate to pay the bills and that the property is registered at the Land Registry.

You have a few options:
1) Use forms AS1 and AP1 accompanied by the probate document to transfer the property to you and your sister in equal share
2) Use the same forms as above to transfer the property solely to your sister
3) Sell the property on the open market - it would be advisable to do option 1 before putting it on the market but this can be done as part of the conveyancing process

In terms of first refusal then no you don't have to. Obviously this is a decision for you as administrator (and depending on the relationship you have with your sister).

The deed of assignment is the AS1. If the property isn't registered then you'd use the same forms as above accompanied by a FR1 and all of the deeds for the property as transferring ownership under probable is one of the triggers for compulsory first registration.

There may be CGT to pay based on the value of the property when you transfer it minus the value at the date of death.

@da_rule,
The property is registered with the Land Registry with my father being the sole propriertor.
So what I understand is that the value at death of my 50% share will be £120,000 and if I accept my sister's offer of £155,000 then there will be a capital gain of £35,000, After deducting my annual allowance of £11,100 - I will have a taxable gain of £23,900 @ 18% which is a max CGT of £4,302 (assuming no costs of disposal)

Alternatively, if I sell the property on the open market for £310,000 then the max CGT liability to the estate will be £70,000 (gain) less £11,100 (annual exemption) less £5,000 (cost of disposal) @ 28% = £15,092 and in effect cost me £7,546.

I hope I'm not way off my estimates??

getmore4less wrote: »

be careful transferring the property into your names is selling on.
Anyone needing a mortgage could hit a problem with less than 6 months ownership by you.

Do you own another property that was your main residence?
Have you been using this one as your main residence?

Was the probate value ascertained.

SDLT will kick in and if sis has another property the extra 3% could also kick in.

@getmore4less,
I do not own another property - and this has been my main residence for the last 4 years.

Keep_pedalling

As the house has been your main residence for the entire time you have owned it you are exemp from capital gains.

If you sold the whole thing to a 3rd party you would still owe no CGT, but your sister would.

Yorkshireman99

akman786 wrote: »

Thank you all for your replies. Please see below for more clarifications:



@Yorkshireman99,

• the date of death was 5 March 2015
• No I did not get the property professionally valued for probate. I made an estimate based on a few estate agent valuations when I filled out the probate forms.
• I had been living in the property before my father's death and have been living there since. My sister's son who is studying for a course came to live in the house from Oct 2015 to Sep 2016. He has now moved out. Sister lives abroad.

.



@da_rule,
The property is registered with the Land Registry with my father being the sole propriertor.
So what I understand is that the value at death of my 50% share will be £120,000 and if I accept my sister's offer of £155,000 then there will be a capital gain of £35,000, After deducting my annual allowance of £11,100 - I will have a taxable gain of £23,900 @ 18% which is a max CGT of £4,302 (assuming no costs of disposal)

Alternatively, if I sell the property on the open market for £310,000 then the max CGT liability to the estate will be £70,000 (gain) less £11,100 (annual exemption) less £5,000 (cost of disposal) @ 28% = £15,092 and in effect cost me £7,546.

I hope I'm not way off my estimates??



@getmore4less,
I do not own another property - and this has been my main residence for the last 4 years.

Since it has been your residence you will not owe any CGT but your sister will. Your sister needs to get paid for professional advice on her potential tax liability both in the UK and where she is domicled. It is not something that you can rely on well meaning advice from here. A qualified surveyor should be able to decide an actual avlue at the date of death and negotiate with HMR& C if need be to alter the probate valuation.