Probate sale and beneficiaries

xylophone

Your mother died intestate and therefore the rules of intestacy applied - you and your brother shared the estate  - half each.
Your mother had expressed a wish that her grandson should inherit £50,000.
You could have varied the intestacy (within two years of the death) to achieve this but you didn't.

The house has been sold and you and your brother now have the proceeds. You are in agreement that you  want to fulfil your mother's wish.

No problem! You both gift as required from your shares.

But they are now gifts from you and your brother. They are "potentially exempt transfers" in respect of any IHT that may arise on your own estates - keep a note of the gifts with your own wills - you have made them, haven't you?

AnotherJoe

flopsy1973 said:

I'm still somewhat confused it was my mother's wishees her grandson had 50k me and my brother have no issues with this. So does it matter how we give him the money ie from house sale or estate. If you say we have to give it from our share do I have to document this?  How do I find the probate value of house I lost the form ? 

Your mothers wishes are (sorry) irrelevant here.

You and your brother are simply giving £25k each to your son.

This is nothing to do with the house sale other than maybe you need to wait for it to be sold to have the cash.

Its nothing to do with probate.

Its no different to you each having enough money to give him £25k.  The "original" source of the money doesn't matter.  Under different circumstances such as house sold quicker it might have but that doesn't apply to you.

Re CGT,  have you changed the ownership of the house? If not there's one CGT allowance, if yes then there's two.

Grumpy_chap

AnotherJoe said:

You and your brother are simply giving £25k each to your son.

If this is to follow what you believe to be your mother's wishes or not, @AnotherJoe is absolutely correct.
To avoid future family disputes, it may be worth establishing some way of recording that, at this point in time, you are both doing this as your own free will.  Or, you let your brother keep his full inheritance and you give £50k to your son.

greatcrested

Mum should have written a will bequeathing £50K to her grandson. Wills can even be written for £0.00.

The moral here is - always write a will. Have you written yours?

flopsy1973

AnotherJoe said:

flopsy1973 said:

I'm still somewhat confused it was my mother's wishees her grandson had 50k me and my brother have no issues with this. So does it matter how we give him the money ie from house sale or estate. If you say we have to give it from our share do I have to document this?  How do I find the probate value of house I lost the form ? 

Your mothers wishes are (sorry) irrelevant here.

You and your brother are simply giving £25k each to your son.

This is nothing to do with the house sale other than maybe you need to wait for it to be sold to have the cash.

Its nothing to do with probate.

Its no different to you each having enough money to give him £25k.  The "original" source of the money doesn't matter.  Under different circumstances such as house sold quicker it might have but that doesn't apply to you.

Re CGT,  have you changed the ownership of the house? If not there's one CGT allowance, if yes then there's two.

The house is still in parents name if the money is going to the 2 of us we will both be able to use our CGT allowance. ? . I can't remember the probate value on house. I have not written a will 

Mickey666

If the house is still in the parent's names then it belongs to their estate.  You may be the beneficiary but you don't legally own the house and therefore your finances and the estate finances are separate legal entities.  Because it would be the estate selling the houw, not you, your CGT allowance is irrelevant.

You could transfer your house into the beneficiaries joint ownership and then sell the house, but CGT would have to be paid on the transfer value so there would be little point, unless perhaps you plan to keep the property for any length of time.

If the house is transferred before being sold then the estate must justify the vlaue of the house, since there will be no open market sale to prove its value.  For CGT purposes it would be advantageous for the house to have a low value, but you can't just make something up for the paperwork and will need some good justification.  EAs will give a formal 'probate valuation' for a small fee and if you ask nicely they will give the lowest possible valuation

That won't necessarily help with CGT when you come to sell it in your own name as the eventual gain will be higher, though you then have your CGT allowance to help, but it might help with cashflow issues.

DiamondLil

There is a very useful helpline and/or webchat service on the gov.uk website here:

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/probate-general-enquiries

xylophone

Also the price we got is around 25k more than valuation on probate application so how do we stand on CGT since the money is going to be split? 

 I can't remember the probate value on house.

Then how do you know that the sale price is  around 25k  more than the probate valuation?

Has the sale of the house actually completed?

flopsy1973

xylophone said:

Also the price we got is around 25k more than valuation on probate application so how do we stand on CGT since the money is going to be split? 

 I can't remember the probate value on house.

Then how do you know that the sale price is  around 25k  more than the probate valuation?

Has the sale of the house actually completed?

No the sale of house has not completed just offer accepted,  I am in middle of finding solicitor to deal with house sale.
yes i understand the house is still part of estate but when i get the funds will there be a CGT liability ? as administrator of estate i will be deducting expenses and giving my brother his half ? 
Can i take my sons part of it directly out of house sale money or will it have to come as gift from me and my brother after we split it ?
sale price is 185K i remember putting either 155 or 165K on valuation when applying for probate can i find this out from probate office do i need that value ?
thanks
 

xylophone

https://www.gov.uk/government/publications/death-personal-representatives-and-legatees-hs282-self-assessment-helpsheet/hs282-death-personal-representatives-and-legatees-2018
Your conveyancing solicitor will assist.

You will need the probate value. How did you value it for probate?
Do you have an executor's ( administrator's ) account?

As for giving your son some money, I'd suggest that you give your brother his share and if he wants to be a generous uncle, then he can give whatever he wishes, as indeed can you.