Intestate - does family home HAVE to be sold?

Yorkshireman99

Brynsam wrote: »

Are you sure your mum hasn't automatically inherited the whole house? If she and your dad were joint tenants (the most common way for married couples to own property), she will inherit his share on his death, so it will then be entirely up to her what happens to the house.

It would also mean she would inherit a substantial portion of the rest of the estate under the intestacy rules.

martinthebandit

Have a read
https://www.gov.uk/inherits-someone-dies-without-will

It's quite straightforward but, it has to be done correctly

DreamweaverB

Keep_pedalling wrote: »

What is the value of the estate, and how much is the house worth?

Estate worth £900k, house worth £400k but it is/was a working farmhouse so expected to be 100% agricultural relief on IHT for that £400k.

Brynsam wrote: »

Are you sure your mum hasn't automatically inherited the whole house?

Sadly old-fashioned farmers so nothing was in the mum's name, everything in the dad's name!

DreamweaverB

martinthebandit wrote: »

Have a read
https://www.gov.uk/inherits-someone-dies-without-will

Yes, thanks, had seen that but it doesn't explain who decides what gets sold and in what order to pay out IHT, bills and beneficiaries.

Yorkshireman99

DreamweaverB wrote: »

Yes, thanks, had seen that but it doesn't explain who decides what gets sold and in what order to pay out IHT, bills and beneficiaries.

It is the executor or addmistratot who decides. There is NO set order. He has to raise enough funds to pay any IHT, if any. It is entirely up to him. Nobody else has any say in it. Once again I say the executor MUST get professional advice before he does anything. The is absolutely crucial! It could save a heap of tax and grief.i don.t see how clearer I state it. There are so many if, ands, buts and maybes the advice needs to be tailored to each case. You will not find a definitive answer in any other way.

Keep_pedalling

DreamweaverB wrote: »

Estate worth £900k, house worth £400k but it is/was a working farmhouse so expected to be 100% agricultural relief on IHT for that £400k.



Sadly old-fashioned farmers so nothing was in the mum's name, everything in the dad's name!

Based on those numbers, his children stand to inherit £325k and his wife £575k (the first £250k + 50% of the remainder) so if she takes all the non property assets, then the children can pay her £175k to gain outright ownership of the house. If they cannot do that then the house will need to be sold, unless she is willing to be a part owner of the farm house.

Even without agricutual relief the estate should avoid IHT.

getmore4less

£900k £400k property

wife gets £575 kids get £325 between the 3 kids

The 2/3 kids don't have enough to keep the house from their share unless they throw some money into the pot, in effect the wife gets to make the call.

Wife also top of the pecking order to administer the estate.

DreamweaverB

Yorkshireman99 wrote: »

It is the executor or administrator who decides. There is NO set order.

Thanks, this is the answer they were looking for. They will absolutely be taking professional advice but wanted to discuss among themselves on who would be administrator with eyes wide open - the hope was that there were set rules and therefore less arguments on the order in which things were sold but que sera sera.

Keep_pedalling wrote: »

if she takes all the non property assets, then the children can pay her £175k to gain outright ownership of the house.

getmore4less wrote: »

kids don't have enough to keep the house from their share unless they throw some money into the pot,

Yes, thanks, this seems to be the only way to keep the property in the family if the wife wants to sell.

Keep_pedalling wrote: »

Even without agricultural relief the estate should avoid IHT.

getmore4less wrote: »

£900k £400k property - wife gets £575 kids get £325 between the 3 kids

I'd be interested in hearing why you both think IHT shouldn't be due - it would be nice to pass on a glimmer of good news to the family at what is quite a sad and emotionally charged period right now.

getmore4less

DreamweaverB wrote: »

I'd be interested in hearing why you both think IHT shouldn't be due - it would be nice to pass on a glimmer of good news to the family at what is quite a sad and emotionally charged period right now.

it will depend on exact numbers if only spouse relief and nil rate band is available you are close to the single personal nil rate band £325k.

Everything going to the spouse is exempt so just the kids legacies use it all up.

That's without the potential extra relief available.

The key will be the detail, ideally you want the full agri relief and the residential nil rate band and the spouse exemption and that would leave as much of the regular nil rate band transferable.

Which will be handy as the wife estate is already in IHT territory unless the plan is to spend some.

I would research the interactions of the various relief for your specific case to make sure I had as much information for the first appointment to get legal advice on the detailed tax situation and the options to reduce/eliminate IHT/CGT for all.


What do these beneficiaries that want to keep the place want to do with it if the wife does not want to live there?

da_rule

The £575 the wife will inherit is subject to spousal relief and therefore does not count towards IHT. You don!!!8217;t pay IHT in most cases unless the value of the estate is over £325. Therefore the remainder of the estate doesn!!!8217;t appear to be above this (assuming there are no lifetime gifts etc to consider) so therefore there should be no IHT to pay.