Stamp duty on buying brother’s share of inherited property

Brick_blue

Hi All

I’m looking for advice. 

My Father passed away last year leaving his house equally to me and my brother.

It is valued at over £600K.So my share would be half of that.

I want to buy out my brother’s share. It will be my main residence. I have not previously owned any property and wanted to know if I was eligible for the First time buyer exemption.

There is a question on the government Stamp duty calculator that says ‘Have you ever owned or part owned another property?’ in my mind it is not another property as it’s the same one so I’d like to say no but then it says ‘Select yes if you inherited a property’ so I’m confused!

If I do have to pay Stamp duty, would the £250,000  threshold be applicable?

I’m grateful for any advice that anyone can give. 

Thanks!

Grumpy_chap

This question might be more likely to be seen by the stamp duty experts in the forum if moved to the House Buying, Renting and Selling section of the forum.

Commiserations on your loss.

Flugelhorn

have you transferred the property into your and your brother's names? if not then it is still owned by the estate and not you 

Keep_pedalling

Hopefully nothing has been transferred out of the estate yet. If that is the case there are a couple of options depending on the make up of the estate.

If the estate after IHT is £1.2M or more then you have the house transferred to yourself and your brother take his share solely from the remaining assets.

If the estate is smaller than that then you can simply buy your brothers share from the estate. In either case you will pay no stamp duty.

If you have already transferred the property into joint names then you are no longer a FTB and it will cost you around £3000 in SD.

doodling

Hi,

Are the OP and his brother executors?  If they are then they already own the house, albeit as trustees for the beneficiaries.

How does ownership as the executor (i.e. as a trustee) affect first time buyer status?  I would hope that it doesn't as otherwise the consequences to executors (even if they decline to act) would be unfortunate.

Brick_blue

Thanks for the replies. 
The only asset my Father had was his house. My brother and I are joint executors but nothing has been legally transferred as yet. I wanted to know the position before getting the paperwork etc done.

Keep_pedalling

Ndoodling said:

Hi,

Are the OP and his brother executors?  If they are then they already own the house, albeit as trustees for the beneficiaries.

How does ownership as the executor (i.e. as a trustee) affect first time buyer status?  I would hope that it doesn't as otherwise the consequences to executors (even if they decline to act) would be unfortunate.

It makes no difference, executors don’t own the estate.

doodling

Keep_pedalling said:

Ndoodling said:

Hi,

Are the OP and his brother executors?  If they are then they already own the house, albeit as trustees for the beneficiaries.

How does ownership as the executor (i.e. as a trustee) affect first time buyer status?  I would hope that it doesn't as otherwise the consequences to executors (even if they decline to act) would be unfortunate.

It makes no difference, executors don’t own the estate.

Yes they do, from the moment of death, certainly in England.  Obviously that ownership is as a trustee but it is ownership nevertheless.

Who do you think owns the estate?

doodling

Hi,

To answer the OPs question buying out his brother will definitely be subject to stamp duty.

I believe that he will be entitled to whatever reductions in stamp duty first time buyers receive but can't find anything which actually says that anywhere (including in the HMRC SDLT manual).

One for professional advice I'm afraid.

doodling

doodling said:

Hi,

Are the OP and his brother executors?  If they are then they already own the house, albeit as trustees for the beneficiaries.

How does ownership as the executor (i.e. as a trustee) affect first time buyer status?  I would hope that it doesn't as otherwise the consequences to executors (even if they decline to act) would be unfortunate.

And to follow up on my red herring above, trustees do not lose their FTB SDLT status by virtual of any ownership of property they might have on behalf of a trust.