FTB Stamp Duty on Buying Out Brothers share of Inherited Home

BugWelder51

My parents have passed away in recent years and left my brother and I as sole beneficiaries and executors of their estate.

I have dealt with all the paperwork and collecting the majority of assets .
 I am finding it hard to get information on how best to deal with the house.
 
We have approached several solicitors but because they did not deal with the estate they are not willing to give advice regarding the house.
I want to buy my brothers share.
The house is still part of the estate.

My questions are, I live at the house and still intend to once I buy my brother's half share.
I spoke with HMRC SDLT helpline who said as I had inherited my half share , I am no longer a first time buyer when I buy my brother's share which is £320k.
Am I no longer a first time buyer when it comes to stamp duty being due on the £320k. Even though the house is still in the estate and has not been transferred into our names.
Regarding SDLT1 question 34 Who is the vendor?  When I buy it, is it the estate of my father or is it my brother even though the property is not in his name.

Finally can I give my assets from the estate to my brother to reduce the price I pay, if my share was  £60k from savings accounts and life insurance , could I trade that to my brother towards the house so that I am paying £260k . Can I then say to stamp duty I have paid £260k. 
What what would I have to do to demonstrate this rather than risk being challenged that the house has been undervalued.

Thanks.

loubel

Were you and your brother left half of the house each or half of the estate?

BugWelder51

I think it is half of the estate.

The will was written 30 years ago , it says.
 ' I give the residue of my estate to my children for their own use absolutely ' 

Bookworm105

you do not qualify for first time buyers relief irrespective of whether the will specifically gave you a half share of the house or "simply" gave you a half share of estate residue. You are the beneficiary entitled to the property, you are thus already an owner before you buy the remainder of it.

Stamp Duty and Inherited Property - Biscoes Solicitors

BugWelder51

Ok thanks , I have had a read of the link , I am not considered a first time buyer. 

Who is the vendor for the purpose of stamp duty.  My brother is concerned if he is named as vendor some charges may come his way. 

SDLT_Geek

Bookworm105 said:

you do not qualify for first time buyers relief irrespective of whether the will specifically gave you a half share of the house or "simply" gave you a half share of estate residue. You are the beneficiary entitled to the property, you are thus already an owner before you buy the remainder of it.

Stamp Duty and Inherited Property - Biscoes Solicitors

My view is that under English law a person does not acquire a share in a property in an estate until certain events happen, such as the property being assented or appropriated, or administration of the estate being complete.  The OP says "The house is still part of the estate".  That suggests that neither OP nor the brother yet have a share in the property.

I think where the OP says "I want to buy my brothers share" OP does not mean that OP or the brother actually have a share yet in their personal capacities.

OP has a good idea, which is a form of appropriation of assets, where OP says: "Finally can I give my assets from the estate to my brother to reduce the price I pay, if my share was  £60k from savings accounts and life insurance , could I trade that to my brother towards the house so that I am paying £260k . Can I then say to stamp duty I have paid £260k."

It seems the best structure might be for that kind of appropriation to happen first, so OP can be assented a share in the property of about 59% and the brother can be assented a share of 41%.  OP can then buy the 41% share in the property for £260K.  The "vendor" for OP's land transaction return would in this scenario be the brother.  If this could be completed before 1 April 2025, then even without first time buyers' relief, the SDLT would be small (5% of the excess over £250,000).

The brother might not like this structure if he would otherwise be a first time buyer for a purchase by him; this status would be lost by having, and then selling, the 41% share.  If the property has gone up in value much since the death then the brother might be concerned about a possible CGT liability. 

BugWelder51

Thanks that is interesting reading.

Although I think with the April deadline looming, I can't risk the time frame of getting the %. Split registered and then buying my brother out afterwards. I will just avoid the extra £2500 that will be payable after April.

Can anyone clear up who the vendor is for SDLT, in the current situation of,
The house is still part of the estate, It has been left to my brother and I, I will be paying my brother for his share ,
 would the answer be The estate or my Brother.

SDLT_Geek

BugWelder51 said:

Thanks that is interesting reading.

Although I think with the April deadline looming, I can't risk the time frame of getting the %. Split registered and then buying my brother out afterwards. I will just avoid the extra £2500 that will be payable after April.

Can anyone clear up who the vendor is for SDLT, in the current situation of,
The house is still part of the estate, It has been left to my brother and I, I will be paying my brother for his share ,
 would the answer be The estate or my Brother.

You cannot buy a share of the property from your brother until he has a share of the property.  So you either:

(a)  Buy a share in the property from the estate (the money will then sit in the estate until it can be distributed to the brother as a beneficiary) or

(b)  Arrange for the estate to assent the brother a share in the property and then you buy the share from him.

In the first the "vendor" for SDLT is the estate, in the second it would be the brother.

Given the complications, the best "money saving" option here might well be to get proper advice rather than risk getting it wrong for such an important asset.