Deed of variation and stamp duty query

legopony

Hi all,

I'm hoping that someone can offer some advice.

My mum passed away suddenly at the end of last summer. Her will stated that her whole estate came to me. She had talked about changing the will to include my half-brother (her step-son) but hadn't actually gotten around to making the changes.

We have decided that the family home will be split between me and my brother, and as he wants to move in there he will buy me out of the half which is mine.

We have had the house valued and he will need to give me around £100k.

We are drafting a deed of variation to send to the probate office which shows that we are deviating from the will etc.

My brother plans to sell his house, but has arranged to remortgage it to give the £100k if I need it before it's sold (I'm currently house hunting).

Our query is:

Should the deed of variation state that the whole house will be my brothers, or should it say that it's being split? If it should say it's being split should it include details of him buying me out?

Also, as he is selling his house, this won't be a second home for him so he shouldn't have to pay the higher rate of stamp duty but what happens if I need the £100k before he sells his house? Does that put him in a difficult position where he may have to pay more stamp duty? Or will that still be OK?

Obviously we will need to change the title deeds also, which are still in my mum's name currently.

Any since gratefully received!

Thanks

Mojisola

legopony wrote: »

We have decided that the family home will be split between me and my brother, and as he wants to move in there he will buy me out of the half which is mine.

Should the deed of variation state that the whole house will be my brothers, or should it say that it's being split? If it should say it's being split should it include details of him buying me out?

The DOV should only say the whole house will be inherited by your brother if you are passing the whole property to him.

If he is only going to inherit half the value of the house, that's what the DOV should say.

There's no need to mention what he plans to do with the property in the DOV.

Yorkshireman99

legopony wrote: »

Hi all,

I'm hoping that someone can offer some advice.

My mum passed away suddenly at the end of last summer. Her will stated that her whole estate came to me. She had talked about changing the will to include my half-brother (her step-son) but hadn't actually gotten around to making the changes.

We have decided that the family home will be split between me and my brother, and as he wants to move in there he will buy me out of the half which is mine.

We have had the house valued and he will need to give me around £100k.

We are drafting a deed of variation to send to the probate office which shows that we are deviating from the will etc.

My brother plans to sell his house, but has arranged to remortgage it to give the £100k if I need it before it's sold (I'm currently house hunting).

Our query is:

Should the deed of variation state that the whole house will be my brothers, or should it say that it's being split? If it should say it's being split should it include details of him buying me out?

Also, as he is selling his house, this won't be a second home for him so he shouldn't have to pay the higher rate of stamp duty but what happens if I need the £100k before he sells his house? Does that put him in a difficult position where he may have to pay more stamp duty? Or will that still be OK?

Obviously we will need to change the title deeds also, which are still in my mum's name currently.

Any since gratefully received!

Thanks

Rather than rely on well meant advice frrom here spend a few hundred getting paid for professional advice. That way if you get it wrong you have some redress. It is not as simple as it seems.

Mojisola

Yorkshireman99 wrote: »

Rather than rely on well meant advice frrom here spend a few hundred getting paid for professional advice. That way if you get it wrong you have some redress. It is not a simple as it seems.

There are times when spending money can end up potentially saving a lot more money - as Yorkshireman says, this is one of them.

getmore4less

A DOV is for tax mitigation, when written properly,
It can remove your gift of 1/2 the house from your estate back to date of death for your estates potential IHT.
You will need advice/research to get the IHT and CGT clauses correct.

The part you are disposing of will trigger a CGT calculation.
have you been living in the house?
by gifting 1/2 with a DOV it could leave the brother with a dangling future CGT liability for the months he has not been living in the place on that 1/2.

Depending on the numbers for your estate and any CGT exposure there may not be the need for the DOV if there is small/no change of saving any TAX.

It is clear at the moment there is a consideration of £100k however you wrap it.
If the main residence is to be sold, even if the extra SDLT is payable now as a second home it will be refundable as long as sold within the time limits.

Always a good idea to do research ahead of taking advice to get best value from that advice.