Inheritance Tax & Property

Mojisola

Lee_MSE said:

 i am both a beneficiary and the executor. 
in a practical sense, any idea what the process is to sell a house as an executor? 

Just the same as any other owner.

The executors will need to show that they have the legal right to sell the property - death certificate, probate and their identification.

If the property isn't registered at the Land Registry, consider doing a voluntary first registration if your mother is up to signing the forms or if anyone has POA for her.

Keep_pedalling

Lee_MSE said:

Mojisola said:

Lee_MSE said:

am helping mum with her will.
also can someone tell me how post this a house legally / practically gets split 5 ways can you have 5 separate names on the deeds or does one of the siblings have to sell the house to realise the money ? all help appreciated..

You're not writing the will yourselves, are you?
With five beneficiaries, it would be best if the will instructs the executors to sell the property and distribute money between them. 

Hi thanks for the advice, no thankfully im not writing the will but i am both a beneficiary and the executor. 
in a practical sense, any idea what the process is to sell a house as an executor? 

Once probate is obtained the executor has the authority to sell the house, the process will be no different to any other property sale.

You are getting a bit ahead of yourself though, the house may no longer form part of her estate years down the line as she may have moved into rented accommodation or residential care by then,

cookay

Depending on how old or frail she is, she can give gifts to people and as long as they're given 7 years before she dies they aren't counted.
The inheritance tax threshold is £325,000 at the moment but there is way of leaving the house to children or grandchildren and bumping it up to £500,000 but it will depend on the rules at the time!
I think only 4 people can own a house so as previous has suggested instruct to sell the house in the will. 

lr1277

As I understand it, you can’t sell till you get probate. You can’t get probate till you pay the IHT. But you don’t have any money till you sell the property (if it is still part of the estate). I believe you can come to an arrangement with HMRC to make a partial,payment and defer the rest. Other posters may have more knowledge about this or there may be information on the HMRC website. If you have sufficient funds, you could pay the IHT, then recover this money from the estate on the sale of the house.

Lee_MSE

lr1277 said:

As I understand it, you can’t sell till you get probate. You can’t get probate till you pay the IHT. But you don’t have any money till you sell the property (if it is still part of the estate). I believe you can come to an arrangement with HMRC to make a partial,payment and defer the rest. Other posters may have more knowledge about this or there may be information on the HMRC website. If you have sufficient funds, you could pay the IHT, then recover this money from the estate on the sale of the house.

thanks super helpful, will check the probate process in more detail.

Malthusian

cookay said:

I think only 4 people can own a house so as previous has suggested instruct to sell the house in the will. 

Any number of people can own a house; more than 4 owners just requires some additional paperwork (a declaration of trust).

Mojisola said:

And she can spend at least 40k on herself instead of her estate paying inheritance tax without the beneficiaries being any worse off.

Not quite correct. If she spent £40k on herself the beneficiaries would be £24k worse off. 40% tax relief is still a pretty good incentive to spend money on yourself. Bearing in mind that you can offer people 40%+ relief to save into a pension and many of them will still turn it down on the grounds they'd rather spend it, when the Government offers you 40% tax relief to spend your money you can't complain.