Stamp Duty Buying Out Share in Inherited Property

timcrouch

I would be very grateful for any thoughts or pointers on the following situation:

My father has passed away recently, leaving his property and small amount of money to me and my sister.

We have not yet been through probate so it isn’t “ours” yet.

My sister would like to ‘buy out’ the half share of the property that is due to come to me. 

We do not live there any more, she has her own house and would rent out what was dad’s property.

Would Stamp Duty definitely be payable or does it depend on how the purchase of the half-share is made?

Any thoughts gratefully received.

Thank you. 

DE_612183

She'd pay stamp duty om the part she buys from you - based on market value not the value she pays.

Depending on when the property becomes yours you may also have to pay CGT - but as the timeline is so short probably not.

JGB1955

You could reduce your sister's purchase by distributing ALL of the cash to you, with your sister receiving a larger 'balancing' share in the property.  Her purchase should be made from the estate, rather than from yourself.

tetrarch

Excuse my naivete, and happy to be corrected, but why don't you write a Deed of Variation to allocate the house to your sister and then her to gift you the money, then no stamp duty is payable?

Worked example:

House value £450K
Estate Cash £50K

Current will £225K+£25K each

DoV - Sister : House
           You :  50K

Sister then gifts you £200K

The only liability then is if your sister were to pass away within the next 7 years that IHT may be liable from her estate

Regards

Tet

Keep_pedalling

tetrarch said:

Excuse my naivete, and happy to be corrected, but why don't you write a Deed of Variation to allocate the house to your sister and then her to gift you the money, then no stamp duty is payable?

Worked example:

House value £450K
Estate Cash £50K

Current will £225K+£25K each

DoV - Sister : House
           You :  50K

Sister then gifts you £200K

The only liability then is if your sister were to pass away within the next 7 years that IHT may be liable from her estate

Regards

Tet

Because that would be fraud. 

Has your sister any experience in being a landlord? If not then she should really do her homework in taking on such a responsibility. For starters  she should look at any costs involved in bringing the family home up to a standard where it can actually be legally let.

silvercar

Keep_pedalling said:

tetrarch said:

Excuse my naivete, and happy to be corrected, but why don't you write a Deed of Variation to allocate the house to your sister and then her to gift you the money, then no stamp duty is payable?

Worked example:

House value £450K
Estate Cash £50K

Current will £225K+£25K each

DoV - Sister : House
           You :  50K

Sister then gifts you £200K

The only liability then is if your sister were to pass away within the next 7 years that IHT may be liable from her estate

Regards

Tet

Because that would be fraud. 

Which part? DoVs aren't fraud. Nor are gifts.