Passed in laws house in BIL name.

Olinda99

p00hsticks said:

Olinda99 said:

secondly if say one of the parents had died and the second parent was very old or ill then giving the house to the child before death would simply save all the hassle of having to go to probate if there were not much else in the estate. if it is a short enough period then it is unlikely much cgt would be built up.

But if it's a 'short enough period' (i.e within seven years) then there wouldn't be time for the gift to fall outside the estate and so probate may well still be required. And by giving away the property prior to death, the executor would no longer be able to make use of the residential nil rate band - so with CGT a potential double tax whammy.

i guess I don't understand probate - why would probate be required if the parent had already given away the house. The house would be in the child's name. Who would apply for probate if no will and no assets left?

Savvy_Sue

Keep_pedalling said:

bobster2 said:

Ysheramber said:

how do we work out exactly what CGT we've to pay

That infers that the OP thinks the siblings each pay CGT.

The CGT is your BIL ‘s cost and only one exemption of £3000 is allowable.
The siblings have no responsibility  for CGT, which paid on the sale , not the acquisition.

The selling price less the sale costs should be shared equally.

BIL pays the CGT due out of his share.

Alternatively, if you all want to share the cost then you share out the balance left  after paying the CGT but that is a private agreement by the parties concerned. 

BIL doesn't need anyone's agreement to follow this last course of action.

BIL owns the house. BIL is liable for CGT. If BIL wants to sell the house, pay the CGT then distribute the balance equally among the 3 of them - it's entirely up to him.

And if he does this the amount he gifts to his siblings is classed as a gift, so will remain part of his estate for IHT purposes for the next 7 years. 

He could, presumably, do a Deed of Variation for an equivalent amount (if there's enough in the estate) to reduce his own estate?