Wills and CGT

goonerdee72

my mum and dad were married 30 years before dad died.

His will left 50% of the family home to mum and 25% each to my brother and myself. Of course, never acted on the 1/4 each and of course, in our eyes the house was and wood always be mums.

almost 20years later, mum died.her will straight forward 50% to myself and my brother.

The amount in the estate isn’t high to be paying IHT but We both have our own properties and so are confused about what we need to to (if anything) declare on CGT when we go to sell the family home.

As we never acted or wanted to, does this 1/4 each stay in play or can we treat as 100% our mothers?

Assuming as always, tax man will want to push for every penny, would we be liable for CGT based on the difference on just 1/8 of the value of the house when he passed. And what the house with now (Bearing in mind 1/2 being hers when he passed, not to be accounted for in will. Plus 1/2 of his share going to mum as per will)

Confused?!?! I am

Any guidance outs be appreciated

Dee

goonerdee72

*terrible typos here.. apologies, should have checked prior to posting but hopefully makes sense even with poor grammer and typo s

Emmia

What is the value of the property? And the value of your mother's estate? When did your father die?

How was the property held/owned by your parents? Joint tenants or tenants in common? Or was it in the sole name of your father or mother. If you don't know, you can check by paying £7 to the land registry.

poppystar

Did father’s Will give mother the right to live there? If so and this was an IPDI trust then all the value of the house would be reported as being in your mother’s estate. CGT would then only come into play if the house sells for more than the value on date of death of your mother.

Keep_pedalling

Do you have the exact wording for the clauses associated with the property? If you do you can post them here with all personal info redacted. CGT will only be an issue if you and your sibling were left your share absolutely with no clause giving you mother the right to remain living there. It would also apply to your individual shares.

goonerdee72

https://forums.moneysavingexpert.com/discussion/comment/81886689#Comment_81886689

they were still happily married and so no mention of her needing permission to live there.

can you explain IPDI a bit more please?

goonerdee72

Hi Emma

Dad died 2007.

They were /are both named on deeds, both happily married when dad passed and my never remarried.

as mentioned , no IHT to pay due to rules and value of estate.

Thanks

goonerdee72

*mum never remarried or met a partner

goonerdee72

https://forums.moneysavingexpert.com/discussion/comment/81886689#Comment_81886689

here was no mention of permission to remain there as they happily married before he passed.

IPDI… do you have more information on this please?

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81886747#Comment_81886747

An IPDI trust provides a method of both protecting the inheritances of children and the long term security of a surviving spouse. It is particularly useful in blended families or relatively young couples where there is a strong chance that the surviving spouse could remarry. It would normally put legal ownership deceased spouse’s share of the house in trust with the beneficial ownership with the surviving spouse. This also avoids ant CGT liability on the children who are classed as remaindermen.

It seems this was not done and your father left a share to each of his children absolutely so a CGT liability has been created. Did anyone apply for probate for your father?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81886781#Comment_81886781

Please find your dad's will and provide us with the exact wording which you say purports to give you and your brother an outright 50% share of the house to you both.

It would be unusual even in a pre 2007 will for a competent solicitor to have drafted a will in such a way that the surviving spouse's occupation rights were not safeguarded in some way.

Once we are certain you both had an unrestricted 50% share in the property, we can more accurately comment on any CGT exposure you might face at the current time.