First time buyer relief between death and probate award when inherriting

micklesthwaite

Hello. Hopefully somebody might know where I stand with the following: My dad passed away in January. He and my mum owned the house as tenants in common. He left his half of the house to my brother and myself in his will, with the caveat that my mother has the right to continue living in it until her death. My brother and me therefore have been left a quarter each of the house.

I am also a first time house buyer looking to purchase a property of £350,000 soon. I am aware that first time buyer stamp duty relief is lost when you inherit part of a property.

I am also the executor of the will and am in no particular hurry to apply for probate, especially if I can get my stamp duty relief through before probate is acquired.

My question is therefore, at what point am I considered as owning the property from the SDLT perspective?

Appreciate any insight.

Bookworm105

a question for sdlt_geek 
you are the beneficiary of a "major interest" in property under a will. The fact the will is still in the admin period does not alter that fact.

Keep_pedalling

The way that this normally works is that the will creates a immediate post death trust that holds legal ownership of the deceased spouses share, beneficial ownership resides with the surviving spouse, so if the will was drafted correctly you will not have lost your FTB status and will not be subject to the additional 3% SDLT.

Bookworm105

Keep_pedalling said:

The way that this normally works is that the will creates a immediate post death trust that holds legal ownership of the deceased spouses share, beneficial ownership resides with the surviving spouse, so if the will was drafted correctly you will not have lost your FTB status and will not be subject to the additional 3% SDLT.

"Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust"

as you say, comes down to who is the beneficial owner during the admin period, survivor only or survivor and (ultimate) beneficiaries.

SDLT_Geek

micklesthwaite said:

Hello. Hopefully somebody might know where I stand with the following: My dad passed away in January. He and my mum owned the house as tenants in common. He left his half of the house to my brother and myself in his will, with the caveat that my mother has the right to continue living in it until her death. My brother and me therefore have been left a quarter each of the house.

I am also a first time house buyer looking to purchase a property of £350,000 soon. I am aware that first time buyer stamp duty relief is lost when you inherit part of a property.

I am also the executor of the will and am in no particular hurry to apply for probate, especially if I can get my stamp duty relief through before probate is acquired.

My question is therefore, at what point am I considered as owning the property from the SDLT perspective?

Appreciate any insight.

I am assuming the property is in England, so the relevant stamp duty is stamp duty land tax.

It is clear from the facts that the extra 3% SDLT will not be due.  The question, which is more tricky, is whether the status as a "first time buyer" for SDLT is lost.

My view is that:

(a)  Being executor of the Will does not in itself stop you being a first time buyer because (although the legislation does not make it clear) my view is that the executor has the legal title in a different capacity, which should not be relevant for first time buyer's relief for a personal purchase.

(b)  No beneficial interest in the property is acquired personally until something happens for an interest to pass, such as an assent of the beneficial interest, an appropriation of the beneficial interest, or the administration of the estate being complete.  It seems that none of these will happen before OP completes the purchase.

So it seems to me that first time buyers' relief will be available.

micklesthwaite

Many thanks to you all, that's very helpful.

Bookworm105

SDLT_Geek said:

micklesthwaite said:

Hello. Hopefully somebody might know where I stand with the following: My dad passed away in January. He and my mum owned the house as tenants in common. He left his half of the house to my brother and myself in his will, with the caveat that my mother has the right to continue living in it until her death. My brother and me therefore have been left a quarter each of the house.

I am also a first time house buyer looking to purchase a property of £350,000 soon. I am aware that first time buyer stamp duty relief is lost when you inherit part of a property.

I am also the executor of the will and am in no particular hurry to apply for probate, especially if I can get my stamp duty relief through before probate is acquired.

My question is therefore, at what point am I considered as owning the property from the SDLT perspective?

Appreciate any insight.

I am assuming the property is in England, so the relevant stamp duty is stamp duty land tax.

It is clear from the facts that the extra 3% SDLT will not be due.  The question, which is more tricky, is whether the status as a "first time buyer" for SDLT is lost.

My view is that:

(a)  Being executor of the Will does not in itself stop you being a first time buyer because (although the legislation does not make it clear) my view is that the executor has the legal title in a different capacity, which should not be relevant for first time buyer's relief for a personal purchase.

(b)  No beneficial interest in the property is acquired personally until something happens for an interest to pass, such as an assent of the beneficial interest, an appropriation of the beneficial interest, or the administration of the estate being complete.  It seems that none of these will happen before OP completes the purchase.

So it seems to me that first time buyers' relief will be available.

is there a test case for that yet? 
HMRC guidance, and therefore merely their interpretation, not the law, is: "Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust"

rather depends on whether an executor is a "purchaser" in that sense?