Will / trust

Tresinia511

As I said,  it only takes one👏👏👏👏👏, it's the first and most important hurdle

Skint_yet_Again

@RAS said: Dad was the beneficial owner of the whole house, even if half was held in trust for his children. 

You and your siblings do not yet own half or the whole of the property. That can only happen after probate is granted. It is currently held in trust by the executors.

The fact that the executors/trustees of dad's estate are also beneficiaries does not make them owners.

https://forums.moneysavingexpert.com/discussion/6626014/will-trust/p3

Could someone advise me at what point do the remaindermen own the trust share? Dad was the life tenant and only trustee. The property is still in both parents names as tenants in common. Probate has been granted and the property is under offer.

poseidon1

I did explain this ( at length ) much earlier in this thread, but to avoid repetition and for those who may similarly be confused about how a property ( or part thereof ) previously held in IPDI trust is dealt with after the death of the life tenant, see my complete response in this thread on 28 September 2025 (5.34 pm), as futher explained on 29 September 2025 (9.47am).

Skint_yet_Again

Thank you @poseidon1 for pointing me back to your previous advice. Sorry that I got a little lost again. So far:

• The (edit) non taxable taxable trust has been registered with HMRC and closed with no penalty
• Probate has been granted & valid certificates eventually received
• Executor bank account opened
• HMRC personal tax to date of death has been settled & refund received
• All “debts” paid and overpayments received after death have been returned to pension/ DWP / state pension for overpaid amounts relating to periods after death
• House sale is progressing
• House insurance for empty home is in place and council tax is still under Cat F exemption
• Pecuniary beneficiary has been paid
• There was no IHT & should be no CGT & no tax expected to be due during the admin period as taxable income will be below £500

Some of the residuary beneficiaries are now thinking of giving some of their inheritance to their children. Can anyone advise as to the effect a deed of variation may have on the estate? (If any). I am wondering if the 50/50 between property share/trust share would come into it?

jem16

https://forums.moneysavingexpert.com/discussion/comment/81913016#Comment_81913016

I did a Deed of Variation to pass over a good chunk to my sons from my half. I had worked out the amount due from my Mum’s share of the house which would still come to me unless I also did a Deed of Variation on her half which we could have done as within 2 years but I didn’t want to complicate matters too much. The rest of the estate was Dad’s so that was fine. So perhaps consider the figures as your Mum’s half of the house cannot be changed as she died in 2018.

Skint_yet_Again

Thanks @jem16

I saw your thread about deed of variation and note the children would then become residuary beneficiaries. Do we need to do the deed of variation at a particular time / before distribution? I presume we will not need to do R185 if no tax due & it doesn’t affect IHT calc as given to grandchildren.

jem16

https://forums.moneysavingexpert.com/discussion/comment/81913049#Comment_81913049

I did it before distribution just to make it all easier but of course it can be done up to 2 years after death. No R185 needed if no tax due I shouldn’t think as that’s its purpose.

Skint_yet_Again

Thanks for your help @jem16

I assume that it would not affect the tax position of the estate if it was to just move part of the residuary estate to a grandchild?

So I am thinking no need for R185, plus no need to tell other residual beneficiaries or get their agreement and no need to send the deed of variation to HMRC?

Think I will wait until the house is sold. Hopefully within 2 years!

jem16

https://forums.moneysavingexpert.com/discussion/comment/81913327#Comment_81913327

The tax position of the estate is not affected by any Deed of Variation. IHT is calculated on the total value of the estate.

Only the original beneficiary altering their share needs to know about any Deed of Variation. My brother was the other beneficiary and executor and although I informed him I didn’t need to and didn’t need his agreement as his half remained unchanged. The Deed was lodged withnthe Registers of Scotland but it wasn’t sent to HMRC as nothing to do with them. Dad’s estate wasn’t subject to IHT.

We only needed R185 forms as there were dividends and interest during the Amin period and well over £500.

poseidon1

Have noted @jem16's responses on DOVs to redirect residuary estate beneficiaries shares to others and agree the points made.

However, with regard to the 50% house proceeds due to the trust beneficiaries, no DOV is possible.

Those trust beneficiaries personally owned the house as soon as the father died, so any gift they choose to pass to others from their share of proceeds will be personal and caught by the usual IHT rules for personal gifts ( eg £3,000 annual exemptions etc).