Dad died; tenanted property in his estate

ValiantSon

G_M wrote: »

I think I'll go crawl under a rock and start sobbing....

I mistakenly thought the LOA authorised the person to manage the Estate up to (and beyond) Probate.

Mea culpa!

Don't be so precious. You stated something as a fact and you were corrected. Sometimes we make mistakes.

00ec25

Given it is now 2 years since the death, and the estate comprises an ongoing income generating activity (aka tenant's rent !) has the estate submitted a tax return yet for the income in the last tax year?

all income received by the estate is taxable on the estate since it has not yet been wound up and the assets distributed to the beneficiaries, ie, the estate is still in the "period of administration"

an estate does not get a personal allowance for income tax purposes. The profit on the rent is taxable in full and should be reported on an estate tax return...

when an estate sells the property it gets one CGT allowance. Note an estate loses the CGT allowance if the sale takes in the third tax year after the death. As father died in 2016, the estate gets its CGT allowance as follows:
- date of death to following 5th April : yes - so that would be April 17
- next tax year 6th April - 5th April (yr 1): yes so that would be Apr 18
- next tax year 6th April - 5th April (yr 2): yes so that would be Apr 19
- after 6/4/19 the estate gets £0 allowance

As the property has not been sold yet, it will be incurring a CGT liability and it may therefore be cost effective to actually transfer it to the beneficiaries and let them sell it as there are 2 beneficiaries so 2 CGT allowances and no time limit. You need to do some number crunching to see which is best, don't just guess as the estate will need to submit a CGT return if it sells in its name so check when that tax has to be paid as it is different for an estate

https://www.litrg.org.uk/tax-guides/bereavement-and-tax/how-estate-taxed-during-administration

On a personal note I found dealing with my father's estate to be excellent therapy, however, I think OP has still got a lot to learn and do and so may benefit from some outside help ????

tlc678910

Hi OP,
I'm sure all the legal requirements for giving your tenants notice correctly seem onerous - especially at a time of grief. I would like to give you some easy and practical advice to move this forward right now.

Write to your tenants directly. Tell them their landlord has passed away and that you are administrating his estate and unfortunately you need to sell the property to distribute the estate. Tell them this is an informal notice that you will need to sell the house in 4/5/6 months time (however lenient you can manage). Tell them that you will serve them formal legal notice that meets the legal notice requirements and timescales at a later date. Remind them that they are of course welcome to serve their one month notice to move out at any time.

In my (actual) experience the tenants could well start looking immediately and serve notice as soon as they find a decent property. I wanted to return to my rented out home (consent to let on a residential mortgage and used an agent) and it was a very amenable communication in a February that I would ideally like the house back by July/August. The place was vacated by April. Some problems occur because landlords want tenants to move out to their short timetable to avoid any voids treating tenants badly in my opinion.

If the tenants haven't been in touch to serve their notice in 3 months or so you can then start to worry about researching and serving a legally perfect section 21.

Reading these boards regularly you could be forgiven for thinking that every eviction is a battle with tenants looking for legal loopholes or staying until there are bailiffs at the door to get a council house but I think the majority of tenants are just average Joes who if you treat them with the respect they deserve when you are taking away their home will just want to move on and re-establish their piece of mind and security asap.

Hope it works out
Tlc

G_M

ValiantSon wrote: »

Don't be so precious. You stated something as a fact and you were corrected. Sometimes we make mistakes.

Moi? Precious? :rotfl:



Hang around the forum a bit.......!

AdrianC

G_M wrote: »

Maybe I'm being thick, misunderstanding,or just ignorant but.....
Assuming IHT was due, that would need to be sorted before Probate would be granted. The Probate Office would require confirmation (I forget the Form Number) from HMRC.

IHT needs to be done, paid, finished within six months of death.

silvercar

AdrianC wrote: »

TBH, OP, your easiest way to get the estate wrapped up - which should be your priority - is probably to get the property transferred to joint names, you and your brother. You will now be the landlords. An s21 will still not be valid if the tenants didn't get the prescribed info at the start of their first tenancy, and if the GSCs have not been renewed annually since your father died, but at least it separates the two issues.

Logically, all the failings of the previous landlord cannot be foisted onto the new landlord. eg if the previous landlord was aggresive and let himself into the property with no notice, the current landlord cannot shoulder the blame just because the tenancy continues.

G_M

silvercar wrote: »

Logically, all the failings of the previous landlord cannot be foisted onto the new landlord. eg if the previous landlord was aggresive and let himself into the property with no notice, the current landlord cannot shoulder the blame just because the tenancy continues.

'Logically' perhaps.

But legally that's not quite the same as where the previous landlord failed to comply with statutory obligations, where those statutes specify consequences of failure.

It is the tenancy that is judged by the various Acts. So if an AST is created without a gas report, EPC, deposit registration etc, then that tenancy cannot be ended by a valid S21, irrespective of the change of landlord.


That's not the same as judging the actions of an individual landlord eg accessing the property.