Tax liability

puppyBrown9

Hi. My parents owned a house as tenants in common 50/50 split. In their Will my husband and I were named as executors. My mum has passed away and my Dad is to stay in the house until he passes and then the beneficiaries are myself and my sister who will be left the house 50/50 split. When my mum passed I was told in order to protect the half of the house owned by my mum from the state if my dad was to need a care package (the reason the house was owned as tenants in common rather than jointly) that I should get the Land registry to add my name and my husbands name to the house deeds. My concern is when my dad passes as we are on the deeds we will be liable for any CGT, whereas my sister won’t be?  My husband will be liable and he isn’t even a beneficiary which doesn’t seem fair. Any facts please on how this will work I’d be grateful for.  I have obtained Probate.  Thank you 

TheSpectator

Whose advise was it to add you to the deeds. Generally these plans to circumvent the system do not work and create issues further down the line.....as you are finding out. Has this ill thought out plan been implemented yet?

Flugelhorn

don't change the names on the land registry!! - you still "own" the 50% left by your mum or at least a IPDI TRUST  owns it (which I think you have to register)
if this is the case then if the property was sold you& sis would get 50% (without CGT) and 50% would be used to care for your father 

DullGreyGuy

puppyBrown9 said:

My mum has passed away and my Dad is to stay in the house until he passes and then the beneficiaries are myself and my sister who will be left the house 50/50 split. 

That doesn't actually say what happened to her half of the property? 

Often in these setups it would pass to a trust until such time as your father passes but what's actually happened is more important than what normally does

Keep_pedalling

If you mother’s will gave you father the right to live in the house for life then the will has created an immediate post death interest trust. The trust is now the legal owner of her share but your father retains beneficial ownership. This protects both his security and your eventual inheritance. You don’t actually inherit until your father’s death or until such time he no longer needs the house. This also avoids a CGT liability for you when the house is eventually sold. 

It would be a mistake to register half the property in your name as that would undo much of what the trust is set up to do. 

puppyBrown9

Thank you all for your replies. When my Mum passed I was given a telephone number to get general advice re probate and was told then that if I don’t change the Land registry deeds and my father does need care then despite what the Will states my father still owns all the house and the state could claim it all for care fees. Do you not believe this is correct?  Are  a few of you saying that instead of changing names on deed I need to register the iPDI trust?  Thanks again

Flugelhorn

That is is the case but maybe better to get advice from @Land_Registry on this forum

sheramber

You say that your mother’s will said your father was to live on the house  but  what was to happen to her Share after your father died?  Was it to be shared by your sister and yourself,
, giving you 25% each of the house. 

Your mother ‘s will cannot state what happens to your father’s 50% share when he dies. 

He needs to make a will stating what happens to it. 

puppyBrown9

Hi. Thank you. I’ll try land registry on here. Didn’t realise it was here. Yes my dad has a Will that states the same as my Mums. When dad passes the whole house goes 50/50 to me and my sister ( if none of dads half used for care fees)

Land_Registry

The first thing to emphasise is that we have no involvement with the wills/trust created or indeed probate. We register the legal ownership and the wills/trust primarily deal with the beneficial ownership which can, and often is, handled differently. The legal ownership was jointly owned by both parents. The TIC aspect relates to their beneficial ownerships. Nor do we deal with CGT.
Where we come in therefore is usually after all of these discussions have taken place and those with beneficial interests have decided what needs to happen (if anything) with the legal ownership, which we register. Our expertise then comes into play re what forms etc you need to update the register based on those decisions - we are not privy to or part of that decision-making in the same way we have no involvement in the wills or trust creation.
Taking the OP's specific scenario both parents owned the property. On Mum's death that legal ownership passes to Dad as the sole surviving owner. That does not mean he can then do as he wishes but it does mean that probate is not needed for Mum with regards the property as it does not form part of her estate. Probate maybe needed for other things but not the property.
The TIC aspect and split of their beneficial ownerships through the wills/trust created maybe protected on the register by what's known as a form A restriction - Joint property ownership: Overview - GOV.UK. That restriction restricts a sole legal owner for example selling/mortgaging the property on their own. It also puts others, for example a conveyancer/buyer/lender on notice re the beneficial ownership perhaps being split. Such a restriction does not have to be applied for and registered when joint owners are TIC but many do so.
I suspect, but OP can confirm, that when their wills were drawn up and the trust created that a form A restriction was applied for and registered.
If that is the case then one option is to simply update the register re the death - form DJP + certified copy of the death certificate. The register is updated to refer to Dad only and the form A restriction protects the beneficial interests/trust 
Another option is to transfer the legal ownership for example Dad transferring the whole of the legal ownership to himself plus others - as mentioned we are not part of such deliberations so can't advise if that's the 'best' option or not.
Having read numerous examples of similar scenarios on this forum and elsewhere I would agree with others that you need to be sure as to what options exist and what's 'best' now - Mum and Dad will have presumably sought legal advice when drawing up their wills and creating the trust and it would be good to revisit that to understand what the impact is now and how things might change in the future re Dad's health, your own property ownership and more.
I would not recommend simply identifying what forms are needed to update the register in one scenario without being entirely sure and confident that is what's 'best' for all concerned. 
We offer online assisted guidance to help you identify the forms etc needed BUT we can't advise you on whether the option chosen is the 'best' one - HMLR Guide: Start - External  · HM Land Registry
A final NOTE for all re the nuances between legal and beneficial ownership that might be of help/interest. In very basic terms the legal ownership is the whole of the land plus property inc bricks & mortar. You can't have half a kitchen, half a bathroom and half the bricks for example so it is always dealt with as a whole.
The beneficial ownership is the value of the property, the £s and pence for example. That can be split as if a house is worth £150K Mum can have £75K and Dad £75K and leave their respective shares to someone else when they die. As you will appreciate that beneficial ownership can be realised in a myriad of ways either through sale or buy out or more but in this scenario their split allowed for Dad to continue to live in the property so the beneficial ownerships, the £s and pence may not need to be realised until he sadly passes away. 
What impact that beneficial split has on CGT, care costs and more is not something we can assist with. 
Hope that helps in some way

poseidon1

puppyBrown9 said:

Thank you all for your replies. When my Mum passed I was given a telephone number to get general advice re probate and was told then that if I don’t change the Land registry deeds and my father does need care then despite what the Will states my father still owns all the house and the state could claim it all for care fees. Do you not believe this is correct?  Are  a few of you saying that instead of changing names on deed I need to register the iPDI trust?  Thanks again

For the trust to be recognised by the world at large a Form A Restriction should be lodged with Land Registry.  See link below discussing the requirement  and the Land Reistry representative also refers in their post above.

https://www.jonathanlea.net/blog/how-to-register-a-declaration-of-trust-at-the-land-registry/#:~:text=In registered land the way,that proprietor was a trustee

Incidentally and on a separate matter also bear in mind the trust in favour of your father should  be placed on HMRC's separate  trust register within 2 years of your mother's death. Don't overlook doing this, a fine could be in point if failing to do do.