IHT & split Land Registry

Tom99

[FONT=Verdana, sans-serif]It seems possible then than the only IHT calculation which might be wrong is your brother's since he owned a share of your mother's house in Nov 2010.[/FONT]

[FONT=Verdana, sans-serif]Is there any documentation to indicate what percentage share he owned? Otherwise I assume you have to take a half / 50%.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]Note that if you do need to add the value of this half share to your brother's estate and pay IHT on it then the value of the half share is not 50% of the value of the whole but 50% less 15%. So if the full value was say £200,000 then the value of the half share owned by your brother is £200,000 x 50% x 85% = £85,000[/FONT]

[FONT=Verdana, sans-serif]See Section 18.5 of VO's IHT Manual:[/FONT]
[FONT=Verdana, sans-serif]https://www.gov.uk/guidance/inheritance-tax-manual/section-18-undivided-shares[/FONT]

[FONT=Verdana, sans-serif]I don't know whether its possible to argue that, although the legal interest was in your brother's name the beneficial interest was still with your mother, that's where expert advice may come in.[/FONT]

[FONT=Verdana, sans-serif]I assume for your mother's IHT calculations you took the full value of the house and allowed 2x £325k NRB and 2x £100k RNRB = £850k?[/FONT]

Keep_pedalling

It does rather sound like the deceased brother did this in secret. The fact that he took ownership without any consideration of his siblings. With the only two people privy to the transaction now dead finding out the actual facts could be very difficult.

getmore4less

Big_Dipper wrote: »

Everything passed to Mum. No mention of changing Land Registry details.

Who administered the brothers estate?

Big_Dipper

Keep_pedalling wrote: »

It does rather sound like the deceased brother did this in secret. The fact that he took ownership without any consideration of his siblings. With the only two people privy to the transaction now dead finding out the actual facts could be very difficult.

Yes! Mum had IHT planned the rest of estate in great detail. It could be a case that she simply forgot to address this issue. Needless to say it was done in secret and it has unfortunately added unwanted complication.

Big_Dipper

getmore4less wrote: »

Who administered the brothers estate?

My other brother was appointed Executor by my Mum. I need to see if any relevant documents exist form then.

Yorkshireman99

Big_Dipper wrote: »

My other brother was appointed Executor by my Mum. I need to see if any relevant documents exist form then.

Please could you clarify? The only way an executor can be appointed is by a will. or the court.

Big_Dipper

Yorkshireman99 wrote: »

Please could you clarify? The only way an executor can be appointed is by a will. or the court.

I believe he was appointed by my Mum. I could be wrong - but he certainly had her legal approval to administer the estate. I would need to check on the detail.

badmemory

Would it make any difference how the house was owned by mother & brother? As one way would make the house automatically pass to the other outside the estate.

getmore4less

badmemory wrote: »

Would it make any difference how the house was owned by mother & brother? As one way would make the house automatically pass to the other outside the estate.

There are things(like a life interest and transferable nil rate band) that can change the tax position.

Back in 2005/6 the typical approach was to offload assets up to the nil rate band as it was not transferable then.


To go forward selling the house they need the death certificate for the brother and the mothers grant, can't see any reason for that to not go ahead.

Unwinding the tax position can be done separately, that delays winding up the mothers estate as the cash needs to be kept in the the estate in case there are bills to pay.

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executor/administrator probate/administration are often use generically

I suspect OP means the other brother was administrator for the deceased brother intestate estate, either by the mother(first in line) stepping aside or POA.

Lets hope this brother has kept records.

Big_Dipper

On further research I have uncovered the term ‘Gift with reservation of benefit’ (GROB). On the face of it, this does seem to fit the situation closest. The only abnormality being that the ‘recipient’, my late brother, passed away before the ‘donor’, my Mum.

The 7 yr tapered IHT could then apply.

Has anyone else had experience of this?