Title deeds changed

smegmyster

Mum transferred title deeds into the name of me and 3 brothers back in 2003, but mum still lived in the house. Over the years my brothers have all passed away and last week mum died. My name is the only name on the deeds, but I know mum and my brothers wanted their share to transfer to their children if they didn't survive mum. So I effectively have a quarter of the house. If I/we sell the house is it 4 capital gains tax to be calculated or do I have to calculate total capital gains and pay tax, then distribute a quarter of the left over amount to my brothers children, does that then incur inheritance tax? :eek:

Mojisola

smegmyster wrote: »

Mum transferred title deeds into the name of me and 3 brothers back in 2003

Were you 'joint tenants' or 'tenants in common'?

smegmyster

Mojisola wrote: »

Were you 'joint tenants' or 'tenants in common'?

Joint tenants

Mojisola

smegmyster wrote: »

My name is the only name on the deeds, but I know mum and my brothers wanted their share to transfer to their children if they didn't survive mum. So I effectively have a quarter of the house.

smegmyster wrote: »

Joint tenants

No, you own the whole property.

If you want to sell it and give some of the money to your nephews and nieces, that's your decision but you will only have your CGT allowance.

getmore4less

You have quite a complicated situation here because it starts as 4 owners dating back to 2003.

You have to account for each share in each of the brothers estates in order as each one dies their share became owned by those left.

There will need to be an IHT assessment on each estate

THEN you have to get the new CGT base for those shares at DOD.

You became the sole owner when the last brother died and will have various bits of the house at various base levels for CGT.

if I have this right for each B
1/4 2003
1/12 B1
1/6 B2
1/2 B3

xylophone

Unless she was paying you a market rent, this was a "gift with reservation of benefit" so there could be IHT implications - have you checked?

As you were joint tenants and you are the sole survivor, the house belongs to you.

You may sell the property (check your CGT position) and make gifts to your nephews/nieces or indeed anybody else but this may have IHT implications for your own estate.

G_M

1) In 2003 mum made a gift with reservation (as she still lived there) to her 4 sons.
On her death last week, the value of the property at the date of her death is included within her Estate for Assessment for Inheritance Tax.
* did she leave a will?
* if yes, who is her Executor?
* if no, who is administrating her Estate?
* what is the current value of the property?
* does she leave other assets?
* so is the total value of her Estate (including the propety) above the threshold for Inheritance Tax?

2) The 4 brothers owned as Joint Tenants
* when B1 died,was his Estate above the threshold for Inheritance Tax? Did he pay IHT?
* his share was split between the 3 remaining brothers

3) The 3 remaining brothers owned as Joint Tenants.
* when B2 died,was his Estate above the threshold for Inheritance Tax? Did he pay IHT?
* his share was split between the 2 remaining brothers

4) ) The 2 remaining brothers owned as Joint Tenants.
* when B3 died, was his Estate above the threshold for Inheritance Tax? Did he pay IHT?
* his share was inheritted by you - you own 100%

5) if you sell, you will be liable for Capital Gains Tax on the gain you have made in the value of proportion of the property you have owned. So
* what was the value when mum transferred the property into your name (£A)?
* what is the value today (£B)?
* You owned 25% from that time, so pay CGT on 25% of the difference between A & B.
PLUS

* what was the value when B1 died (£C)?
* what is the value today (£B)?
* You owned 33%% from that time, so pay CGT on 33% of the difference between C & B
PLUS

* what was the value when B2 died (£D)?
* what is the value today (£B)?
* You owned 50%% from that time, so pay CGT on 50% of the difference between D & B
PLUS

* what was the value when B3 died (£E)?
* what is the value today (£B)?
* You owned 100% from that time, so pay CGT on 100% of the difference between E & B


edit: actually I think the above double counts some of your ownership/capital gains - it's more complex than that. May be beyond me to work out!

getmore4less

It as per my post.

silvercar

G_M wrote:

5) if you sell, you will be liable for Capital Gaind Tax on the gain you have made in the value of proportion of the property you have owned. So

* what was the value when mum transferred the property into your name (£A)?
* what is the value today (£B)?
* You owned 25% from that time, so pay CGT on 25% of the difference between A & B.
PLUS

* what was the value when B1 died (£C)?
* what is the value today (£B)?
* You owned 33%-25%=8% from that time, so pay CGT on 8% of the difference between C & B
PLUS

* what was the value when B2 died (£D)?
* what is the value today (£B)?
* You owned 50%-33%=17% from that time, so pay CGT on 17% of the difference between D & B
PLUS

* what was the value when B3 died (£E)?
* what is the value today (£B)?
* You owned 100% from that time, so pay CGT on 100%-50%=50%of the difference between E & B

I think that my figures avoid the double counting that G_M alluded to.

G_M

silvercar wrote: »

I think that my figures avoid the double counting that G_M alluded to.

That looks more sensible!

AdrianC

G_M wrote: »

* when B1 died,was his Estate above the threshold for Inheritance Tax? Did he pay IHT?
* when B2 died,was his Estate above the threshold for Inheritance Tax? Did he pay IHT?
* when B3 died, was his Estate above the threshold for Inheritance Tax? Did he pay IHT?

Am I missing something? As JTs, the brothers shares simply ceased to exist the moment they drew their last breathes - so their shares aren't part of their estates for IHT porpoises.

As has been said, if the OP wishes to gift part of the value of their 100%-owned property to the families of the brothers, then that's up to them, and would be a very generous gift.