Inheritance Buyout

mr_mr_mr

Hi,
My late Mother left a house to me and my brother 50% share. The executors withdrew due to ill health and I was name sole Administrator (have gone through probate and got Letter of administration). I want to buy my brother out and we have agreed a price based on market value etc..

I spoke to the Land Registry and because only I am on the letter of admin all I have to do is fill a few forms in to get the house registered in my name. My issue is that when I dump 200k+ into my brother account that a). I do solely own house and in some random world he cannot take me to court and say that is half his and b). He would be OK Tax wise if for example I died in the next 7 years. 

FYI: I have already obtained legal advice although I received a lot of very contradictory responses. I want to see what people on here think and then I can make a more informed choice based on all the information I will gather. 

Thanks in advance Mike

davidmcn

Do you mean you don't have anything in writing from your brother agreeing that you're getting his share?

mr_mr_mr

davidmcn said:

Do you mean you don't have anything in writing from your brother agreeing that you're getting his share?

We haven't done anything yet so I do not have anything apart from text and an email that informal. If I were to be doing that then before I put any money in I would get him to sign something I write or download with a more specific set of details. My question is really would that be enough? Just me getting him to sign a document I create with a witness signature of course??

Stubod

...I would have thought a signed (and witnessed) receipt, would have been sufficient??

davidmcn

After all, that's pretty much all you get in a normal sale.

AdrianC

Don't overthink it. There's nothing magical about "a house".

The estate contains assets worth £400k. (Those assets just happen to be in the form of a house).

You and your brother are each entitled to £200k in value from the estate.

You are receiving your £200k in the form of 50% of the property.
You are paying the estate £200k cash to buy the other 50% of the property from it. The estate transfers the entire house to your name.

Your brother is receiving his £200k in the form of cash.

You each receive £200k, 50% of the £400k value of the estate.

There is no tax liability if you die, because you've not made any gift to him.
There is no way he can chase ownership of the house, because he received his bequest from the estate in the form of cash.

SDLT_Geek

You need to think about stamp duty land tax on the £200,000 you pay.

macman

Depends on the will. Does it say 'I leave my house to my two sons in 50% shares' (in which case, the solicitor who drafted it was incompetent)? Or, much more likely, does it say 'I leave my estate to my two sons in 50% shares'?
If the latter, your sole duty as Administrator is to liquidate the estate and distribute the assets according to the will. You are perfectly entitled to purchase the property, or any other assets, from the estate, just as any other buyer would, as long as you have your brother's written agreement.

mr_mr_mr

SDLT_Geek said:

You need to think about stamp duty land tax on the £200,000 you pay.

It will be my only home so will not be subject to stamp duty.

macman said:

Depends on the will. Does it say 'I leave my house to my two sons in 50% shares' (in which case, the solicitor who drafted it was incompetent)? Or, much more likely, does it say 'I leave my estate to my two sons in 50% shares'?
..

It says estate 50% shares to me and my brother the house is not directly mentioned.

Thanks everyone for your input. I think as AdrianC did say that I was over thinking it as it is a house and thinking there must be more to it.

greatcrested

As long as there is a clear, signed, receipt for the £200 as your brother's inheritance from the Estate there's no problem.

Perfectly normal, indeed essential, for an Executer/Administrator to obtain receipts for any payments, bequests, distributions out of the Estate.

Then LR form AS1 to transfer owership to you.

Inheritance tax on the Estate if applicable must already be paid if you have Probate.

Inheritance Tax on the £200K / 7 year rule? I assume you mean if you were to die within 7 years? Does not apply as you are not giving him a gift.

xylophone

clear, signed, receipt for the £200 

£200,000...........