Buying out a sibling on an inherited property

pecker_w

Can anyone give some guidance. I, together with my brother recently inherited a small property following the death of our mother. Only a small flat with a market value of about £230000. Because of time and effort spent with my mum by myself and my wife my brother is quite happy to recognise this and receive slightly less than 50% of the valuation. Is Stamp Duty payable on the amount of money we pay him for his share! Therefore the less we pay, being sensible, the more we save on Stamp Duty! And in any case what is the lowest level of Stamp Duty that payment is due?
Pecker_w

lincroft1710

Is the flat being sold? Is it still in your mother's name?

DE_612183

if it's not going to be your main residence you will pay the higher rate of stamp duty -assuming you are in england - Land Tax is different in Wales and perhaps Scotland.

RAS

Is this going to be your main residence?
Are you a first time buyer?
Who is selling, the estate or has it been transferred to you?
How did you value the property for probate?

pecker_w

Still in mums name and no it wont be our main residence. Intend to put my daughter in it who has some health issues therefore only a relatively small income. Dad will end up paying most of the bills!
Valued for probate by getting a local estate agent. No inheritance tax due to its value. Applying for Probate myself  online saved approx. £1700 although the initial incompetence of HMRC meant it took about 5 phone calls and about 2 hours on the phone to them before, eventually, the man I dealt with could see the mistakes of those I had spoken with before. I received the Probate certificates two days later and an emailed apology from HMRC!

DE_612183

Who's name will the property be in?

Yours or your daughters?

Albermarle

Stamp Duty Land Tax: Residential property rates - GOV.UK

Bookworm105

technically as the estate has not yet "appropriated" the property over to you and sibling the effective date for SDLT purposes has not yet occurred. As it appears you do not want to pay for professional advice I suggest you explore the possibility of doing a variation of the will by yourself.

however, when you do buy your siblings share once it has been appropriated to them then you would be liable to pay the additional rate SDLT on that purchase as a) you will be increasing your share above 50% by means of purchase (which triggers SDLT) and b) you already own another property (which triggers the additional rate)

additional rate applies above threshold value £125,000 with effect from 1 April 25
Higher rates of Stamp Duty Land Tax - GOV.UK

pecker_w

Thanks for all the replies. Now put in the hands of a local solicitor who looks as though he's not old enough to shave yet! Fingers crossed.