Land Registry forms for Inheritance of Property

andyuk2005

Hi all, 
I'm hoping someone could map out the correct forms which require filling in regards to inheritance of a property and transfer of registered keepers. Here's the scenario;
My mum and dad owned their property, free of a mortgage, as tenants in common. 
My father passed away last year, with my mother being the sole inheritor of his assets. 
During dealing with the estate, a Deed of Variation was made so that my father's half of the property is to pass to his 3 sons. This will mean my mum will own one half, with the other equally shared amongst her 3 children.
Now is the time to complete the HM Land Registry forms as we have got probate.
Looking at the forms, I can't work out which are supposed to be completed due to this unusual situation. Should I do the following:
- Complete Form DJP to remove my father from the registered title
- Then complete Form AP1 to update the record to show my mum and her 3 sons as the registered owners.

I'm guessing that the Land Registry forms won't show what percentage share of the property is owned by who, rather that is on the Deed of Variation.
Do I need to complete form DJP if I am changing the register immediately afterwards?

Thanks for any of your help on this, it's appreciated!

Land_Registry

andyuk2005 said:

Hi all, 
I'm hoping someone could map out the correct forms which require filling in regards to inheritance of a property and transfer of registered keepers. Here's the scenario;
My mum and dad owned their property, free of a mortgage, as tenants in common. 
My father passed away last year, with my mother being the sole inheritor of his assets. 
During dealing with the estate, a Deed of Variation was made so that my father's half of the property is to pass to his 3 sons. This will mean my mum will own one half, with the other equally shared amongst her 3 children.
Now is the time to complete the HM Land Registry forms as we have got probate.
Looking at the forms, I can't work out which are supposed to be completed due to this unusual situation. Should I do the following:
- Complete Form DJP to remove my father from the registered title
- Then complete Form AP1 to update the record to show my mum and her 3 sons as the registered owners.

I'm guessing that the Land Registry forms won't show what percentage share of the property is owned by who, rather that is on the Deed of Variation.
Do I need to complete form DJP if I am changing the register immediately afterwards?

Thanks for any of your help on this, it's appreciated!

If they were both registered owners you don’t need probate to deal with the property as it doesn’t form part of his estate. The legal ownership passes to your Mother and you always have to deal with the whole legal ownership 
It’s his beneficial ownership that’s been left to the three of you so if you all want to become legal owners you’ll need Mum to transfer it from herself to herself plus the three of you 
https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property
You'd lodge an official or certified copy of the death certificate with the application. No form DJP needed. 

Transferring it into four names is an option here but it’s worth seeking legal advice as well just to understand your options. We deal with the outcome of such deliberations and in some cases some families don’t transfer things but that can often depend on what provisions for example Mum has made as well as personal circumstances and thoughts of the three of you as well 

FreeBear

Land_Registry said:  Transferring it into four names is an option here but it’s worth seeking legal advice as well just to understand your options.

Must get some legal advice. The three children, if not already home owners, would lose their First Time Buyer status along with all the financial advantages that brings. They may well be liable for second home stamp duty if they purchase/move. Also Capital Gains Tax to consider.. Then what happens if one wishes to raise some capital by selling his share, gets dragged through a messy divorce, or becomes bankrupt ?

steampowered

Why are you doing this?

This sounds like a bad idea for the three children. Especially if any of them are not already home owners:

1) This will be treated as a "second property" for the children, so they will become subject to higher rate SDLT when they purchase a property of their own (n.b. if they are selling their current main residence and buying a new one, they may benefit from the "replacement of main residence" exemption. However, if they are not already property owners, this will not apply, and higher rate SDLT will be due even on their first property).

2) If any of the children are first time buyers, they will lose all entitlement to first time buyer support - e.g. they will no longer be eligible for first time buyer stamp duty relief, no longer eligible for Lifetime ISAs. 

3) When the property is eventually sold, capital gains tax may be payable on the children's share.

It could be far better for your mother to inherit all of the property, and leave it to the children in her will. 

SDLT_Geek

steampowered said:

Why are you doing this?

This sounds like a bad idea for the three children. Especially if any of them are not already home owners:

1) This will be treated as a "second property" for the children, so they will become subject to higher rate SDLT when they purchase a property of their own (n.b. if they are selling their current main residence and buying a new one, they may benefit from the "replacement of main residence" exemption. However, if they are not already property owners, this will not apply, and higher rate SDLT will be due even on their first property).
Good point.  There is rule that, for the purposes of the 3% extra SDLT an inherited share (not exceeding 50%) does not "count against" person for three years after its acquisition.
2) If any of the children are first time buyers, they will lose all entitlement to first time buyer support - e.g. they will no longer be eligible for first time buyer stamp duty relief, no longer eligible for Lifetime ISAs. 
3) When the property is eventually sold, capital gains tax may be payable on the children's share.

It could be far better for your mother to inherit all of the property, and leave it to the children in her will. 

Some good points here.

andyuk2005

Thanks very much for the help Land Registry and the comments other users.
For our purposes, what was suggested by the Land Registry is suitable, but it is worth noting for other readers all those important points about stamp duty and capital gains.
Thanks again!

getmore4less

Also changes the IHT situation losing transferable nil rate band.

Often the better compromise is a IPDI trust