Dividing an estate in two where there is more cash than property value

crashedandcool

Having(In Scotland) "bought" the other out from a pretty much similar situation(except the cash was not the value of the house so I needed a mortage). Outside of difference between English/Scots law essentially the house belongs to the estate firstly and foremost. It will need sold at some point as being joint beneficies you would each own "half a house" as the transfer from the estate would need to be equal among beneficies. Unless sold beforehand. This is where the deed of variation comes in as it alters the will before disturbution(or probate I'm not sure) of the estate. It was suggested to me by one solicitor, but I didn't go down this road. I think because there wasn't enough in the pot and/or no other solicitor nodded their head to the DOV when I mentioned it to them. In the end I bought it off the estate before it was transferred to anyone and stamp duty was due on the purchase.

badplasterer

Yes, the probate value is being used.  Point noted regarding CGT.

The estate has, in effect, already been distributed; this agreement was in place (verbally) from the start, very soon after probate was granted (a few months after death) all the other assets were liquidated, deceased accounts closed with cash held in a personal account I am using as an executor account which has now been mostly distributed (cash was held in the account for a while at my sister's request while she decided what to do with it)

So it's really just the final paperwork and account that need completing now, plus land registry assent forms.   Time since death is just over a year, capital gain (if any) in that time would be modest given the size/condition of the property, but I will waste no more time getting this completed now, and make sure documentation makes it clear that the agreement and actual distribution occurred straight after probate.

msb1234

Has your sister had a couple of RICS valuations on the property as it stands now? 

I would say that needs to be done as she could be handing over a greater % if the value has increased. 

sheslookinhot

poseidon1 said:

You do not indicate how long ago your mother passed and whether the property has gone up in value since then.

Since what you propose is indeed a variation  whereby you give  up a share of cash in exchange for you taking sister's share of the property, your efforts at a DIY variation may inadvertently trigger a CGT liabilty on your sister unless the variation is drafted with the correct CGT election embedded therein.

See below HMRC DOV checklist with specific reference to note 5 on page 2.

https://assets.publishing.service.gov.uk/media/5a7df4d040f0b6230268838d/IOV2.pdf

Despite your objection to using a solicitor to get this right ( expressed in a previous post), seeking guidance from this forum on how to draft and incorporate the relevant cgt election in the variation maybe unwise.

Would CGT not only be relevant when the OP sold the property ?

sheramber

sheslookinhot said:

poseidon1 said:

You do not indicate how long ago your mother passed and whether the property has gone up in value since then.

Since what you propose is indeed a variation  whereby you give  up a share of cash in exchange for you taking sister's share of the property, your efforts at a DIY variation may inadvertently trigger a CGT liabilty on your sister unless the variation is drafted with the correct CGT election embedded therein.

See below HMRC DOV checklist with specific reference to note 5 on page 2.

https://assets.publishing.service.gov.uk/media/5a7df4d040f0b6230268838d/IOV2.pdf

Despite your objection to using a solicitor to get this right ( expressed in a previous post), seeking guidance from this forum on how to draft and incorporate the relevant cgt election in the variation maybe unwise.

Would CGT not only be relevant when the OP sold the property ?

CGT is relevancy is  to the sister  ‘selling’ her share to the OP.