Transfer of inherited property

LongDays

My father passed away in 2013 and then my mother died in 2015. They owned their house jointly and myself and my sister inherited half each. I was the sole executor after mum died and probate has been granted and sorted with the exception of the house.

The house is still registered in both my parent's names and my sister wants to buy my share and own the house in joint names with her husband.

Looking at the Land Registry site it looks as though I will need to fill in forms AS1 and AP1 and provide copies of the wills and grant of probate. Then fill in ID1 for both my sister and her husband.

Will this be enough to transfer the house from my parent's name to my sister and husband?
Or does it have to be done in two stages, transfer the house from parent to myself and sister and then transfer again to sister and husband.

Would appreciate any advice

Yorkshireman99

The transfer is relatively straightforward but you need to be careful about the CGT issues and stamp duty. Has either of you been making this your main residence?

LongDays

Thank you Yorkshireman99, no neither of us are using the house as main residence at the minute. I think there will be no CGT but I hadn't considered Stamp Duty!

Yorkshireman99

CGT will be payabble, less any allowances, on the gain from the DOD and the sale date. You may need a professional valuation. Who valued the house for probate?

LongDays

The house was valued at £120k for probate, based on the average valuation from 3 estate agents, it is in an area where house prices have not risen over the last few years.

What is the 2 year time frame? Mum died in February 2015

Yorkshireman99

LongDays wrote: »

The house was valued at £120k for probate, based on the average valuation from 3 estate agents, it is in an area where house prices have not risen over the last few years.

What is the 2 year time frame? Mum died in February 2015

An estate agent's valuation may not be acceptable to HMR&C. It is improbable that the value has not risen over the last few years. Just be prepared to have the value challenged by the District Valuer. However the gain on your half may be below the limit at which CGT is payable. As far as your siister is concerned it will not be a problem if she makes it her primary residence.

LongDays

My sister intends to rent it out so I guess she will have to pay the stamp duty.

Thank you for the help, I was unaware that the rules around stamp duty had changed last year.

getmore4less

You only need to consider CGT
Sis only needs to consider SDLT for immediate cost/Tax.


she will need to establish her acquisition values for both bits for future CGT assessments.


Unless the estate was over IHT the DOD value is yet to be ascertained by HMRC so check what is needed for the CGT return, even if no CGT is due there may still be a need to do the return.

The guys on the tax board can help with the options for this as you can get HMRC to have a look or just send in your returns and see what they say.

Do a bit of your own research on the DOD valuation and now plenty of areas in the country are stagnant or rising slowly enough to have minimal/no CGT to pay.
(there should be enough real sold data by now to make a good estimate of DOD market value unless a unusual property)

For Sis all that matters now is how much she pays you(any consideration not just cash) for your share as that is used to assess the SDLT.

The main issue will be does she have another property as the 3% SDLT will kick in if that consideration is £40k+

Depending on the will and the other assets it may be possible to have done a distribution to avoid any tax.

The 2 years being mentioned by QS was most likely a DOV to redirect(gift) the house to a person different to the beneficiary,

Probably not relevant for your situation as yours is a buy out not a gift.

NOtE : For Sis the acquisition value of your share for future CGT is it is the market value not what she pays you as you are connected parties under CGT legislation).

LongDays

Thank you, we now understand the issues around stamp duty and capital gains.

I have downloaded the forms AS1, AP1 and ID1 and it looks like we will probably have to use a conveyancer after all. The nearest Land Registry office is a two hour drive away a bit stuck on proving identity!