CGT Question

RAS

If you believe that the house may need to be sold to pay your half brother's care fees, you need to understand the IPDI trust.

Depending on what is in your mother's will, you may receive half the money from the house when it is sold or when your brother dies.

So get out mum's will and go see a STEP solicitor now. Much better to do it now than riding yourself panicking or making incorrect decisions. It will cost a few quid but will make life easier if you understand the situation.

jsh99

RAS said:

If you believe that the house may need to be sold to pay your half brother's care fees, you need to understand the IPDI trust.

Depending on what is in your mother's will, you may receive half the money from the house when it is sold or when your brother dies.

So get out mum's will and go see a STEP solicitor now. Much better to do it now than riding yourself panicking or making incorrect decisions. It will cost a few quid but will make life easier if you understand the situation.

I already know I won't get anything till he passes, even if the property is sold he is to benefit from the invested money of my half.

Even though he has about 200,000 cash and about 250,000 from his half of the house I still can't to do a variation as it will be deemed a deprivation of assets due to him getting the interest in my half of the proceeds.  I've already been told that on here.  So I can't do that even if he agreed - which I am not sure he would as he's already accused me of only being interested in his money when I tried to get him to do a will.  (I told him he could leave it all to charity, I just wanted a will so it didn't leave another mess for me to deal with after my father and our mothers deaths that I've had to sort out all alone.)

Keep_pedalling

jsh99 said:

RAS said:

If you believe that the house may need to be sold to pay your half brother's care fees, you need to understand the IPDI trust.

Depending on what is in your mother's will, you may receive half the money from the house when it is sold or when your brother dies.

So get out mum's will and go see a STEP solicitor now. Much better to do it now than riding yourself panicking or making incorrect decisions. It will cost a few quid but will make life easier if you understand the situation.

I already know I won't get anything till he passes, even if the property is sold he is to benefit from the invested money of my half.

Even though he has about 200,000 cash and about 250,000 from his half of the house I still can't to do a variation as it will be deemed a deprivation of assets due to him getting the interest in my half of the proceeds.  I've already been told that on here.  So I can't do that even if he agreed - which I am not sure he would as he's already accused me of only being interested in his money when I tried to get him to do a will.  (I told him he could leave it all to charity, I just wanted a will so it didn't leave another mess for me to deal with after my father and our mothers deaths that I've had to sort out all alone.)

This would not be seen as deliberate deprivation of assets as he would have far too much capital for that to come into play. A DoV would be the ideal solution if he is never going back to the house, but the problem is he is the only one who can make one. 

How long ago did your mother die? 

jsh99

Keep_pedalling said:

jsh99 said:

RAS said:

If you believe that the house may need to be sold to pay your half brother's care fees, you need to understand the IPDI trust.

Depending on what is in your mother's will, you may receive half the money from the house when it is sold or when your brother dies.

So get out mum's will and go see a STEP solicitor now. Much better to do it now than riding yourself panicking or making incorrect decisions. It will cost a few quid but will make life easier if you understand the situation.

I already know I won't get anything till he passes, even if the property is sold he is to benefit from the invested money of my half.

Even though he has about 200,000 cash and about 250,000 from his half of the house I still can't to do a variation as it will be deemed a deprivation of assets due to him getting the interest in my half of the proceeds.  I've already been told that on here.  So I can't do that even if he agreed - which I am not sure he would as he's already accused me of only being interested in his money when I tried to get him to do a will.  (I told him he could leave it all to charity, I just wanted a will so it didn't leave another mess for me to deal with after my father and our mothers deaths that I've had to sort out all alone.)

This would not be seen as deliberate deprivation of assets as he would have far too much capital for that to come into play. A DoV would be the ideal solution if he is never going back to the house, but the problem is he is the only one who can make one. 

How long ago did your mother die? 

October 24

When I asked about the variation before I am sure it was you who mentioned it would not be in his interest and it would be classed as deprivation of assets.  I don't htin his savings were mentioned at that point but he has already used over 60,000 on the care home, and he still has 100,000 left and a pension pot he has not taken of another 100,000 or monthly payments.  Plus his half of the house of approx 250,000, or thereabouts.

poseidon1

jsh99 said:

RAS said:

If you believe that the house may need to be sold to pay your half brother's care fees, you need to understand the IPDI trust.

Depending on what is in your mother's will, you may receive half the money from the house when it is sold or when your brother dies.

So get out mum's will and go see a STEP solicitor now. Much better to do it now than riding yourself panicking or making incorrect decisions. It will cost a few quid but will make life easier if you understand the situation.

I already know I won't get anything till he passes, even if the property is sold he is to benefit from the invested money of my half.

Even though he has about 200,000 cash and about 250,000 from his half of the house I still can't to do a variation as it will be deemed a deprivation of assets due to him getting the interest in my half of the proceeds.  I've already been told that on here.  So I can't do that even if he agreed - which I am not sure he would as he's already accused me of only being interested in his money when I tried to get him to do a will.  (I told him he could leave it all to charity, I just wanted a will so it didn't leave another mess for me to deal with after my father and our mothers deaths that I've had to sort out all alone.)

I recall that was the upshot of the legal advice you received last year.

I think rather than run yourself ragged trying to find solutions that you cannot implement without your brother's co-operation, just let events now take their course.

If your brother ends up using up all his immediate cash on cost of care then the next bridge to cross will be a decision on house sale to free up his share, a bridge only worth crossing if and when you get there.  There is only so much you can take on in the circumstances.

In the interim, presumably house is secure, well insured and running costs being met from you brother's personal income whilst he is in the care home?

Incidentally, sounds like you might need a bit of a break from this, in seems to be a bit of a saga which is wearing you out.

Savvy_Sue

I'm also going to say that I know you're worried about caring for your brother, and perhaps especially if he decided to return home and was able to arrange this. You don't have to be involved in this. You can make it clear to his current carers that you are neither willing nor able to do more than you are already doing (and perhaps less). I don't know what care he would need, but you don't have to do it, or organise it. 

poppystar

poseidon1 said:

poppystar said:

jsh99 said:

poseidon1 said:

Mjsh99 said:

Hi all,

I've inherited half my mother's house.  The other half is my half brothers and he still lives there and has an IPDT so he can stay as long as he wants (which is fine)

He has no will, yes I've tried but it was a hard slog getting LPA and despite everything I have done/doing for him he seems to think I am only after his money.

Anyway as his only close relative I think I will inherit his half on his passing.

If I then sell the property am I right in thinking that I will only pay CGT on the gain in value on the half I already have in the IPDT?  Or will I have to pay CGT on the whole new value when he passes?


Also is there any IHT allowance for siblings or will I have to pay on the whole of his estate?  I know about for spouses/children allowances.


Thanks.

I understand from a previous post from you that:
1) Half the house previously owned by your mother pass to an IPDI trust for your sibling, which will pass to you on his death
2) Your sibling co owned the other half with your mother, and continues to retain this in his personal ownership.


You indicate he has made no will so on his eventual death, the 50% of the value of the house in the trust  will be added to his personal assets ( his half share of the house plus anything else)  and if that total exceeds his NRB ( £325k), 40% IHT will be assessable on the excess.

 The residence nil rate band of £175k is not available for gifts of the home between siblings and in fact there are no special tax exemptions for assets passing between siblings.

As for CGT, you are correct you will only pay tax on any gain accruing on the entire property following your siblings eventual death. If sold prior to his death ( see below) his main residence exemption should avoid any lifetime CGT.

As for your options to mitigate IHT, the only possibility was to vary the will to to get rid of the IPDI trust and for your mother's half share to pass direct to you. However the problem with that was covered in my previous post back in November per thread below- I assume nothing has changed to make that  more viable?

https://forums.moneysavingexpert.com/discussion/6571423/immediate-post-death-interest-anything-i-can-do#latest

In any event from what you said previously, nursing home fees ( at £1700 per week) are eroding your siblings personal estate, so the longer he lives the smaller his taxable estate becomes, potentially leaving just the trust fund if the property is sold to release his personal half share for nursing home costs.

With all due respect, and in view of all your older posts, you do appear to be going around in circles on this issue.

OK OK!

I think I just never understood the implication that my 'half' would actually count as his because of the IPDI.

Mum wanted me to have her half - but let my brother live there as long as he wanted, not for all of it to be his, because she wanted me to live there eventually.

Sigh what a bloody mess.

All of it isn’t his. You have inherited half. You have a legal interest in half but he has a beneficial interest in the whole because he is living there. You will still get your half when your brother dies, assuming he predeceases you. 

If you had been left the half with no IPDI trust the house would probably have to have been sold at that point to pay you. Or, if you let him live there, you would have been responsible for half the maintenance and would eventually have been subject to CGT on your half. 

You won’t be paying the IHT, it is your brother’s estate that will. Best to think if it that way. Because he is single with no direct descendants he will only have an allowance of the basic £325k which it sounds like will be exceeded by the house and any other assets he has. So you will inherit something from an estate that has paid IHT but you won’t have any CGT liability. 

Useful to be aware brother now in nursing home. House may need to be sold to release his capital to help meet those escalating costs. Longer he lives the lower his eventual taxable estate.

Ah, thank you. When OP said brother “still lives there” I assumed that was literal.

jsh99

>>>In the interim, presumably house is secure, well insured and running costs being met from you brother's personal income whilst he is in the care home?

Yes all this is being done as he says he wants to go home - but he's been in hospital/nursing home since Jan 24 so I'm wondering if it will ever happen.  But he does not want me to sell the house, and without his consent I guess I can't (although I have LPA and if his money runs out........)

I had hoped we could sell the house, get him into an assisted living place and that along with my half of my mothers estate I could pay off my mortgage and go part time to help look after him, but that's not going to happen without the DoV, which is unlikely. 

Anyway I think as some have suggested I just have to let things run their course now.