Selling Property After Death of Father & Splitting Sale Proceeds between Adult Children

inquisitivewanderer

My sister in law recently lost her Father and has been named sole executor of his will.
One of the more complex matters of his estate is the sale of his house since he and her Mother divorced but the Mother was still on the title deeds to the property.
She has no interest in any of the proceeds of the sale and wants all the money to be split between her three adult children. The house will likely sell for less than £150k.

Can anyone explain the process of doing this please and confirm whether inheritance tax or any other type of tax would be applicable? My sister in law has a lot on her plate and is feeling the pressure of dealing with the estate whilst trying to figure out the process behind a number of things required.

Alter_ego

The mother owns the house. She needs to sell and distribute the proceeds. She may also be liable for capital gains tax.

Keep_pedalling

The first thing to establish is how the property was owned, joint tennants or tenants in common. If the former then she will now own the whole property outright, if the later she owns one share and the estate the other.

In either case she can only pass her share through a gift. IHT is not an issue although it might effect your SILs mother’s estate if she dies within 7 years of making the gift.

Alter_ego

Keep_pedalling said:

In either case she can only pass her share through a gift. 

I see no reason she cannot sell her house, Please explain

Keep_pedalling

Alter_ego said:

Keep_pedalling said:

In either case she can only pass her share through a gift. 

I see no reason she cannot sell her house, Please explain

What I meant was that her share of the house not pass to the children via the deceased fathers estate, it will be given as a gift from her. Yes she can sell the house ( or jointly sell with the executor if it was held as TiC)

poppystar

Luke221987 said:

My sister in law recently lost her Father and has been named sole executor of his will.
One of the more complex matters of his estate is the sale of his house since he and her Mother divorced but the Mother was still on the title deeds to the property.
She has no interest in any of the proceeds of the sale and wants all the money to be split between her three adult children. The house will likely sell for less than £150k.

Can anyone explain the process of doing this please and confirm whether inheritance tax or any other type of tax would be applicable? My sister in law has a lot on her plate and is feeling the pressure of dealing with the estate whilst trying to figure out the process behind a number of things required.

Just to clarify who is the ‘she’ who has no interest in proceeds? Your sil who wants proceeds to go to her adult children or divorced mil who wants the proceeds to go to her adult children one of whom would be sil? 

getmore4less

You start with the divorce and the financial settlement.

That could have
severed any joint tenancy
Given full beneficial interest to one of them.

The land registry does not always get updated. 

Marcon

Keep_pedalling said:

Alter_ego said:

Keep_pedalling said:

In either case she can only pass her share through a gift. 

I see no reason she cannot sell her house, Please explain

What I meant was that her share of the house not pass to the children via the deceased fathers estate, it will be given as a gift from her. Yes she can sell the house ( or jointly sell with the executor if it was held as TiC)

If she wasn't living there, she could be liable for capital gains tax on this 'gift', which would be charged as if she had received the full market value for her share. Definitely one where you need proper legal advice.

xylophone

the sale of his house

Is his interest in the house specifically mentioned in his will?

Land_Registry

The process for selling is straightforward as the legal ownership passed to her as the sole surviving owner. The property does not form part of the late Father’s estate
If the register refers to a form A restriction, which many people refer to when referencing tenants in common, then she can’t transfer it on her own. However she can appoint someone to do it with her, that can be his executor but does not have to be. 

Together they complete the transfer and take receipt of the purchase monies. How the monies are then split depends on the wider arrangements agreed between them or benefiting/interested parties since
We don’t deal with tax issues so can comment on what’s payable or not in such cases.