Inherited property and SDLT

shiraz99

Can someone quickly clarify a couple of things for me. A bit of background first; I, along with two siblings have inherited my late parents house and they've both agreed to "sell" their share of the house to me.

When doing the property transfer does the transfer have to be done to all three of us beneficiaries then in turn transfer their shares to me, or can it be done directly to me.

Also, is there any Stamp Duty involved? I was under the impression there was no SDLT applicable for an inherited property but a solicitors I've just contacted insists there will be. Any help would be grateful.

Savvy_Sue

I think you can do the transfer and then change the name to you, which is probably the best way to go. The Land Registry are usually pretty good at confirming that kind of stuff. 

I wouldn't generally argue with a solicitor to whom you have given all the facts. There wouldn't be any stamp duty to pay if you were receiving the whole house as an inheritance, direct, BUT you're not, you're paying your siblings for their share. Also, is it a second home for you? I think there are exemptions in this area if you're then selling your first home. 

If in doubt, you could always get a second opinion from a solicitor. 

Or have a read of this: 

https://www.homesellingexpert.co.uk/guides/stamp-duty-on-inherited-property#

I am more and more in agreement with your solicitor ... but it may depend on the values involved. 

Land_Registry

shiraz99 said:

Can someone quickly clarify a couple of things for me. A bit of background first; I, along with two siblings have inherited my late parents house and they've both agreed to "sell" their share of the house to me.

When doing the property transfer does the transfer have to be done to all three of us beneficiaries then in turn transfer their shares to me, or can it be done directly to me.

Also, is there any Stamp Duty involved? I was under the impression there was no SDLT applicable for an inherited property but a solicitors I've just contacted insists there will be. Any help would be grateful.

As far as the transfer of ownership goes then No re two transfers to get to the end result agreed to.
Use our online assisted guidance once you have checked and confirmed how the property is registered and how
Any Qs re tax/sdlt etc then contact/check with HMRC

shiraz99

Thank you @Savvy_Sue for the clear explanation. You're correct that SDLT will apply, but as this will be around £220k in total and the house will be my main residence I believe this will be at the current zero rate, I maybe wrong.

I will ask on the Land Registry discussion for confirmation regarding the actual transfer process.

Keep_pedalling

What is the value of the property and the total value of the estate? Unless there are no other assets you can reduce or  completely remove SDLT by the way you distribute the estate. For example if the estate consists of a house worth £200k and other assets worth £400k then you take the house and other siblings split the rest resulting in no SDLT. If the house is worth £400k and there are £200k of other assets, the other siblings take the other assets leaving you with only having to buy out 50% instead of 66.66%.

shiraz99

Keep_pedalling said:

What is the value of the property and the total value of the estate? Unless there are no other assets you can reduce or  completely remove SDLT by the way you distribute the estate. For example if the estate consists of a house worth £200k and other assets worth £400k then you take the house and other siblings split the rest resulting in no SDLT. If the house is worth £400k and there are £200k of other assets, the other siblings take the other assets leaving you with only having to buy out 50% instead of 66.66%.

The 2/3s share of the property equates to £214 so I'd assume that there is a zero rate for stamp duty, given that this will become my main residence.

shiraz99

Land_Registry said:

shiraz99 said:

Can someone quickly clarify a couple of things for me. A bit of background first; I, along with two siblings have inherited my late parents house and they've both agreed to "sell" their share of the house to me.

When doing the property transfer does the transfer have to be done to all three of us beneficiaries then in turn transfer their shares to me, or can it be done directly to me.

Also, is there any Stamp Duty involved? I was under the impression there was no SDLT applicable for an inherited property but a solicitors I've just contacted insists there will be. Any help would be grateful.

As far as the transfer of ownership goes then No re two transfers to get to the end result agreed to.
Use our online assisted guidance once you have checked and confirmed how the property is registered and how
Any Qs re tax/sdlt etc then contact/check with HMRC

Thanks for that, I did have a look at the guidance but apart from a mention of buying out beneficiaries it didn't really go into much detail as to how to complete the forms in this scenario.

I take it that I, as executor (and beneficiary), would complete FR1 but if TR1 is to be used, instead of AS1, who is the Transferor(s) and Transferee(s)? Do I (as executor) transfer the property to myself (as beneficiary) for the consideration of 2/3s the house value then pass this on from the estate to the other siblings?

Apologies, I've also updated my post in the LR discussion, you don't need to reply to it there.

Land_Registry

shiraz99 said:

Land_Registry said:

shiraz99 said:

Can someone quickly clarify a couple of things for me. A bit of background first; I, along with two siblings have inherited my late parents house and they've both agreed to "sell" their share of the house to me.

When doing the property transfer does the transfer have to be done to all three of us beneficiaries then in turn transfer their shares to me, or can it be done directly to me.

Also, is there any Stamp Duty involved? I was under the impression there was no SDLT applicable for an inherited property but a solicitors I've just contacted insists there will be. Any help would be grateful.

As far as the transfer of ownership goes then No re two transfers to get to the end result agreed to.
Use our online assisted guidance once you have checked and confirmed how the property is registered and how
Any Qs re tax/sdlt etc then contact/check with HMRC

Thanks for that, I did have a look at the guidance but apart from a mention of buying out beneficiaries it didn't really go into much detail as to how to complete the forms in this scenario.

I take it that I, as executor (and beneficiary), would complete FR1 but if TR1 is to be used, instead of AS1, who is the Transferor(s) and Transferee(s)? Do I (as executor) transfer the property to myself (as beneficiary) for the consideration of 2/3s the house value then pass this on from the estate to the other siblings?

Apologies, I've also updated my post in the LR discussion, you don't need to reply to it there.

Each of the forms links to guidance as to their completion. But the forms/guidance won;t be specific to a single transaction but will look to cover the most common points around all applications/transfers etc
If you are uncertain of what's required then I would recommend seeking legal advice/assistance as we can't advise on a number of aspects including the will, how you 'buy out' another beneficiary and the tax implications
Forms FR1/DL are correct re the first registration and I would deal with those first and assemble the required deeds/documents also
The form TR1 is then used by the executor to transfer the ownership to the named beneficiary. If that's you on both counts then complete the form TR1 accordingly with you as executor as Transferor and you as beneficiary as Transferee. 
The guidance explains how to complete the consideration and you would be factual on that count. I would recommend inc a covering letter to explain the full market value and how you have bought out the beneficiaries for £X as a result