Dilemma to probate or not

ahfat41

As the title says I cannot decide whether to probate or not. He left his 50% share of house in a will trust giving me life interest and 25% each to the children. Probate was not necessary. His estate was below IHT threshold and he left everything to me except gifting £10,000 to his grandson. He gifted £9000 a year to his son for past 7 yrs. Am just concerned on my death how his unused NRB will be calculated to be transferred as no probate and no official documentation? In this case should I apply for probate in due course to facilitate the executor job of having to go through his financial accounts years later on. Advice anybody? Thanks 

Keep_pedalling

I would just draw up a set of estate accounts and make sure your executors know where to find it. You also need to register the trust with HNRC.

ahfat41

I might do a trial run of his assets by using the iht web calculator and give the results to my daughter in a file fir later.So many conflicting advises. Doing probate, adding their names to the register. Need to consider their first time buyer and status and capital gains if I add their names with mine as legal owners. So confused might be better if I do nothing. Just fill form DJP and register the trust. I will discuss with my executor what she wants me to do. Thanks

RAS

As explained previously, you do not add your children's names to the Land Registry, because they own nothing. You are the owner of your 50% of the house, and the IPDI trust is the legal owner of the other half, NOT your children.

You register the IPDI trust with HMRC, and can list the children as trustees.

You might also want to discuss registering a restriction on the deeds naming one or more of your children as trustees whose consent is needed if you sell the house, but they will NOT be legal owners.

So all your concerns about first time buyer status, and CGT are irrelevant. It's important you and your children understand this.

Who are the executors of your will?
Do you have POA in place?

ahfat41

RAS said:

As explained previously, you do not add your children's names to the Land Registry, because they own nothing. You are the owner of your 50% of the house, and the IPDI trust is the legal owner of the other half, NOT your children.

You register the IPDI trust with HMRC, and can list the children as trustees.

You might also want to discuss registering a restriction on the deeds naming one or more of your children as trustees whose consent is needed if you sell the house, but they will NOT be legal owners.

So all your concerns about first time buyer status, and CGT are irrelevant. It's important you and your children understand this.

Who are the executors of your will?
Do you have POA in place?

It seems I can transfer if I want to. The children are the executors, poa in place.I read this from Land Registry forum. 

The trust/% shares arrangement is quite common and isn't a headache from a registration perspective as we register the whole of the legal ownership and that always has to be transferred as such.
So in cases of joint owners, irrespective of whether they are TIC or a trust etc is involved, when one of them dies the legal ownership passes to the surviving joint owner. Probate is not needed as a result to deal with the property and the surviving joint owner can, if that's what is wanted, transfer the whole of the title to themselves plus a beneficiary for example as here

doodling

Hi,

Legally it is correct to register the names of the trustees as owners of the property because they legally (but not beneficially) own the share owned by the trust.  That is not an optimum thing to do however, because:
1  It is not clear from the land registry entry that the legal owers are trustees rather than absolute owners.
2. That lack of clarity can lead to issues with such things as
2a) Capital Gains Tax (where trustees of this type of trust wouldn't be liable but absolute owners would be if they weren't living in the property).
2b) Issues with increased taxation as a result of second home ownership (ie.
 SDLT) if the trustees already own a property or are thinking of buying one.  A trustee would not be affected by this but an absolute owner would.
2c) Issues with the first time buyer status of the trustees if they have not yet bought a house, again a trustee wouldn't be affected by this but an absolute owner would.
In theory, I think that all of these can be resolved even if the trustees names are added to the title register, (I haven't checked this though so don't relay on it!) but it would be a whole load of hassle that no-one would want to deal with.

The better, and still legally correct way to indicate ownership of the trustees at the Land Registry is to have the "Trustees of the late [x]." identified as one of the legal owners.

If the executor, trustees, remaindermen, surviving owner and their eventual executor all get on and are unlikely to try and defraud each other then doing nothing until the second death is an option (althought it is still necessary to register the trust with HMRC).