House sale after probate?

Pejayef

I am executor for my in-laws, Mum passed away in October 2019, and Dad in March 2020, probate has been granted and IHT tax declaraton submitted, whole estate being around £315k, part of which is a rented property. As my wife, her sister and Brother are the beneficiaries, can they decide together to keep the property and share the monthly rent? Or does the property need to be sold and proceeds split? 

MumOf2

After taking into account specific legacies in the Will, and if all the beneficiaries are in agreement, the property can continue to be let out and the rent (less expenses) can be divided in proportions as per the Will.  So if there are no legacies and the estate is apportioned equally between two sisters and brother, then a third to each.

MumOf2

Pejayef

That sounds about right, i sort of needed someone to affirm my logic! I guess we would still have to do the land registry into their names though.....

Dox

Pejayef said:

That sounds about right, i sort of needed someone to affirm my logic! I guess we would still have to do the land registry into their names though.....

Beware the final exit strategy. What if one sibling wants to sell and the others don't? What if one dies - if the property is owned as joint tenants their share would automatically pass to the two survivors, or if owned as tenants in common their share could be left to anyone? Can create huge family problems if you don't address it at the outset.

Keep_pedalling

Dox said:

Pejayef said:

That sounds about right, i sort of needed someone to affirm my logic! I guess we would still have to do the land registry into their names though.....

Beware the final exit strategy. What if one sibling wants to sell and the others don't? What if one dies - if the property is owned as joint tenants their share would automatically pass to the two survivors, or if owned as tenants in common their share could be left to anyone? Can create huge family problems if you don't address it at the outset.

Agree, this could get messy further down the road if one wants out, or major repairs are required and one or more owners does not want to stump up the money. The other issue is that this could get expensive if any of the beneficiaries does not currently own their own house, as they would be subject to additional stamp duty when they do by somewhere of their own.

Pejayef

Thanks, thats given me something to think about and discuss amongst us...

Dox

Keep_pedalling said:

Dox said:

Pejayef said:

That sounds about right, i sort of needed someone to affirm my logic! I guess we would still have to do the land registry into their names though.....

Beware the final exit strategy. What if one sibling wants to sell and the others don't? What if one dies - if the property is owned as joint tenants their share would automatically pass to the two survivors, or if owned as tenants in common their share could be left to anyone? Can create huge family problems if you don't address it at the outset.

Agree, this could get messy further down the road if one wants out, or major repairs are required and one or more owners does not want to stump up the money. The other issue is that this could get expensive if any of the beneficiaries does not currently own their own house, as they would be subject to additional stamp duty when they do by somewhere of their own.

...and would be excluded from any initiatives designed to help first time buyers. Could also be an issue if they are renting some forms of social housing.

AnAnonUser

As said, fraught with all sorts of issues. What happens when one wants to evict tenants and the other two dont*, or two wish to spend on a new roof/boiler/etc and the third doesn't and so on. Or they disagree about the expenditure, expensive boiler / cheap one, repair roof / replace, and so on.

* There was a poster here some months back, he was 1/3 owner, 2/3 owners were a couple, the "rule" about decisions was 'majority decides' which meant he couldn't even sell his share to them (they didnt want to buy), let alone force a sale. 

xylophone

 As my wife, her sister and Brother are the beneficiaries, can they decide together to keep the property and share the monthly rent? 

They could...but (allowing for the fact that it is perhaps the problem cases that come to the boards),  experience of these leads other posters to envisage problems in the future, some of which have been touched on above.

Then, do they want the responsibilities of being landlords?

https://www.gov.uk/renting-out-a-property

And are they aware of the tax situation?

https://www.gov.uk/renting-out-a-property/paying-tax