Prolonged Probate & Planning Permission

bubby08

Hello would really appreciate some advice if possible,

I will try and be as concise as possible.

my grandfather passed away 10 years ago, unfortunately his choice of executers left a lot to be desired. Unfortunately as well as taking what funds and valuables he could he failed to execute the will after a length process we have filed with hmrc to have probate processed and the estate (house) settled to my grandads surviving daughter, my mother. However this application has been with the probate service for 9 months now and it is becoming a real problem. For various reasons my mother is going sign the title deeds of the house to me once probate is finalised however I was wondering if there is anyway before probate is settled if I can apply for planning permission on the property myself , having looked online  some of statements vary as to if this is possible.

thank you so much in advance. 

Keep_pedalling

When you say his surviving daughter, did her siblings have any children? If so why are they not receiving anything? 

I would hold off doing anything until you have established the your mother is indeed the sole beneficiary and, bearing in mind the property value will have increased in the passing 10 years, how much capital gains tax your mother would have to pay to transfer the property to you.

bubby08

Hi Keep Pedalling,

what makes you think they are sibilings? My mother is the sole beneficiary,  that isn’t the query, and I assume the fundamental element of the process the probate service undertake is confirming that. The query is simply if ownership of property is a stipulation when submitting planning permission. 

Thanks in advance 

Mojisola

bubby08 said:

what makes you think they are sibilings?

"my grandads surviving daughter" implies that there were other children who predeceased their father.

Malthusian

bubby08 said:

 The query is simply if ownership of property is a stipulation when submitting planning permission.

Well that one has a very simple answer, yes. Councils won't generally consider an application for planning permission on land that you don't own. I very much doubt that they will accept an application from you at present - your mother's ownership of the property is a done deal legally (assuming she is indeed sole beneficiary per Keep pedalling) but yours is not. She could still change her mind.

I would just ring the relevant council and ask if they will consider an application and whose name they would want to be on it rather than mess about with hypotheticals.

As a successful planning application would increase the value of the property, and therefore potentially the capital gains tax payable, is it wise to submit an application before the property has been passed to you, which will crystallise any capital gains?

(I'm aware it's a big if and planning permission may well not be granted until after the transfer has taken place, but it's another reason to avoid complication by waiting until the ownership is settled before applying.)

(From a selfish perspective you could argue that as your mother will be liable for any capital gains tax bill payable on gifting the property, it is desirable for a gain from planning permission to be under her name rather than yours. However inheritance could make that moot even from a selfish perspective. Also, if somebody's asset that they were about to give away suddenly jumps in value, they may change their mind about giving it away.)

Keep_pedalling

bubby08 said:

Hi Keep Pedalling,

what makes you think they are sibilings? My mother is the sole beneficiary,  that isn’t the query, and I assume the fundamental element of the process the probate service undertake is confirming that. The query is simply if ownership of property is a stipulation when submitting planning permission. 

Thanks in advance 

The way you worded you opening post suggested other siblings had not survived her, but it seems that is not the case. As already advised you will have to wait until ownership is no longer within the estate to apply for planning permission. 

Had this been sorted out within 2 years of the death your mother could have transferred to you through a deed of variation, but now your mother is very likely to have to pay a significant CGT bill within 30 days of of transferring the property, which might be significantly higher is you successfully obtain PP before any transfer to you.

RAS

As above, the value of the property with PP is likely to be much higher and your mum's CGT bill higher if you move quickly. Better to wait, and get the valuation done first.

bubby08

Thank you all sorry I am unsure of exactly what you are implying my my mother being landed with a capital gains tax, are you saying as she has inherited the house outside of the two year transfer of deeds windows], she would have to pay CGT and have the amount based on Increase of value over the last 10 years?

excuse my lack of knowledge on this I have googled CGT but can’t really find any dumbed down explanation of what I am looking at,

thanks all

Marcon

bubby08 said:

Thank you all sorry I am unsure of exactly what you are implying my my mother being landed with a capital gains tax, are you saying as she has inherited the house outside of the two year transfer of deeds windows], she would have to pay CGT and have the amount based on Increase of value over the last 10 years?

excuse my lack of knowledge on this I have googled CGT but can’t really find any dumbed down explanation of what I am looking at,

thanks all

Your mother appears to have inherited the house (or should have inherited the house) at the time of your grandfather's death, at which point the house will have had a value of £xxxx. When she disposes of the house (which she is apparently going to do by gifting it to you), she will be treated as having sold it at the market value prevailing at the time the disposal is made, even if she gives it away. The difference between £xxxx and market value at time of disposal is a capital gain and she is taxed on that, unless the property is her main or only private residence. 

CGT on property is higher than on other assets. Basic-rate taxpayers pay 18% and additional-rate taxpayers pay 28% (rather than 10% and 20%).  Don't forget that any capital gains will be added to other potentially taxable income in the tax year, so may push her into a higher bracket.

If your mother believes that giving away her house will avoid care home fees (and I appreciate that may not be the reason at all, but just in case...), please have a look at this article: https://www.radiotimesmoney.com/retirement/hold-onto-your-house/

bubby08

Thank you Marcon, is it true that there is a threshold for CGT? I believe the property maybe under that.

tank you in advance

Keep_pedalling

bubby08 said:

Thank you Marcon, is it true that there is a threshold for CGT? I believe the property maybe under that.

tank you in advance

If the gain is under her annual CG allowance then there will be no tax to pay. This is currently £12,300.