Stamp duty first time buyer - just inherited share of property

peachykeen

Looking to buy for first time having saved 10% deposit. Sadly since then, my mum died and house left to me and my brother and sister, so third each. It's valued at £210000. Considering not selling and renting it. Any advice on if this affects me as "first time buyer" but now (nearly) third part owner of a property re: FTB mortgages and stamp duty. Very confused.

00ec25

you are no longer classified as a first time buyer:

Definition of a first time buyer
In order to count as a first time buyer, a purchaser must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world. This includes previous acquisitions by inheritance or gift, or by a financial institution on behalf of a person under an alternative finance scheme. Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust.
https://www.gov.uk/government/publications/stamp-duty-land-tax-relief-for-first-time-buyers-guidance-note

however, you are not going to have to pay the higher rate SDLT when you do buy because you own less than 50% of the inherited property - provided you purchase within 3 years of your inheritance

3.53 Following the death of an individual, the beneficiaries of their estate may become entitled to a major interest in a dwelling. The ways in which this might happen could be:
● where the deceased leaves the interest as a specific gift,
● where the personal representative transfers the interest in satisfaction of a pecuniary gift or an interest in residue, or
● under the law in another country, the deceased’s interest passes automatically to the beneficiary as an heir to the estate.

3.54 Where a person becomes entitled to such an interest in the three years before a chargeable transaction, the interest can be ignored provided that:
● the beneficiary became a joint owner of the interest by inheritance,
● the beneficiary and any spouse or civil partner’s combined interest has not exceeded half of the major interest in the three years before the effective date of the chargeable transaction


https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-for-purchases-of-additional-residential-properties

davidmcn

00ec25 wrote: »

Following the death of an individual, the beneficiaries of their estate may become entitled to a major interest in a dwelling. The ways in which this might happen could be:
● where the deceased leaves the interest as a specific gift,
● where the personal representative transfers the interest in satisfaction of a pecuniary gift or an interest in residue, or
● under the law in another country, the deceased’s interest passes automatically to the beneficiary as an heir to the estate.

So the OP may remain a first time buyer if the executor(s) haven't yet transferred the property to them.

G_M

Has probate been granted?

Who is/are executer(s)/administrator(s) of mum's estate?

has the property been transferred out of her name?

peachykeen

Thanks for the advice so far. My brother is overseeing it all. It's still in progress..I have no idea how long it takes - I've been completely overwhelmed since it happened, only just now realising the possible implications.

00ec25

davidmcn wrote: »

So the OP may remain a first time buyer if the executor(s) haven't yet transferred the property to them.

Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust.

OP is beneficiary, so i read it as the FTB rule applies whether the property remains part of the will trust or not?

the exception would be if the will directs the property be sold and it is the proceeds that come to the beneficary?

davidmcn

00ec25 wrote: »

Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust.

OP is beneficiary, so i read it as the FTB rule applies whether the property remains part of the will trust or not?

the exception would be if the will directs the property be sold and it is the proceeds that come to the beneficary?

The bit you've quoted is just to clarify that merely being a trustee (or executor) doesn't affect qualification for the relief, so would only be relevant if the OP were an executor.

I don't think there's an assumption that a bequest is deemed to take effect immediately on death, but only if and when the property is actually transferred to the beneficiary.

SDLT_Geek

On the death of a person the assets vest in the personal representatives in a fiduciary capacity. The beneficiaries have a right to compel proper administration of the estate, but no "major interest" in any dwelling forming part of the estate. The beneficiaries only obtain property rights later, such as when there is an assent to them, or an appropriation, or the administration of the estate is complete.

So I would not expect the fact of the mother's death to disqualify OP from being a first time buyer.

Tom99

[FONT=Verdana, sans-serif]My understanding from the above is that if the property is sold by the estate and not transferred to the three beneficiaries you will still be classed as a FTB.

[/FONT] [FONT=Verdana, sans-serif]In order to rent out the property I assume the beneficial interest would need to be transferred to the beneficiaries and you would not be a FTB.

[/FONT] [FONT=Verdana, sans-serif]As far as the extra 3% SD for second homes is concerned even if your share is transferred to you, providing you buy within 3 years of that transfer you will not be liable to the extra 3% because your interest in the property is only 33%.[/FONT]

getmore4less

SDLT_Geek wrote: »

On the death of a person the assets vest in the personal representatives in a fiduciary capacity. The beneficiaries have a right to compel proper administration of the estate, but no "major interest" in any dwelling forming part of the estate. The beneficiaries only obtain property rights later, such as when there is an assent to them, or an appropriation, or the administration of the estate is complete.

So I would not expect the fact of the mother's death to disqualify OP from being a first time buyer.

That is not how beneficial interest is being interpreted by some councils for council tax, they are using DOD where the property is left to individuals.

peachykeen

Struggling to get my head around all this but thank you for taking time to reply. The house is going into three names, likely won't be sold. Paperwork still in progress.