Inheritance - stamp duty - which route
Discussion
Preface this with - I don't want to break the law- I want to understand the most efficient legal way of minimizing tax burden.
Both my grandparents are recently deceased. Their home - valued at £800k is to be inherited by their children as per their will. Two of the siblings are executors. I dont quite understand the calculation but because both died there is no inheritance tax on the estate.
None of the siblings want to retain the house so propose to sell it and split the money equally.
One of the grand children does wish to buy the house and keep it in the family. This would require a mortgage.
It would be a "second purchase" so STLD would be around £50k.
Its my understanding that if you inherit a property you do not pay SDLT but would obviously be liable for CGT when sold.
Is there any way that the executors can redirect the inheritance such that the grandchild inherits the property and then re-mortgages to pay off the siblings? Thus avoiding SDLT?
Is there any other things that should be considered in this? It can't be an unusual scenario!?
What would I google if I were looking for a professional to advise?
Both my grandparents are recently deceased. Their home - valued at £800k is to be inherited by their children as per their will. Two of the siblings are executors. I dont quite understand the calculation but because both died there is no inheritance tax on the estate.
None of the siblings want to retain the house so propose to sell it and split the money equally.
One of the grand children does wish to buy the house and keep it in the family. This would require a mortgage.
It would be a "second purchase" so STLD would be around £50k.
Its my understanding that if you inherit a property you do not pay SDLT but would obviously be liable for CGT when sold.
Is there any way that the executors can redirect the inheritance such that the grandchild inherits the property and then re-mortgages to pay off the siblings? Thus avoiding SDLT?
Is there any other things that should be considered in this? It can't be an unusual scenario!?
What would I google if I were looking for a professional to advise?
Your grandparents between them can leave £500k each ie £ 1m between them including the value of the house up to this limit ( £ 325k plus £175k ).
As the grandchild hasn’t inherited anything then I believe SD would still be payable as he is simply purchasing the house from the beneficiaries.
The Executors cannot change the will nor indeed the beneficiaries.
The beneficiaries themselves can either individually or collectively however make a Deed of Variation and amend who their share goes to.
This could be all of it or some of it.
This has to be done within 2 years of the deaths of your Grandparents.
I would suggest a Solicitor should draw this up and could also advise on your other points.
As the grandchild hasn’t inherited anything then I believe SD would still be payable as he is simply purchasing the house from the beneficiaries.
The Executors cannot change the will nor indeed the beneficiaries.
The beneficiaries themselves can either individually or collectively however make a Deed of Variation and amend who their share goes to.
This could be all of it or some of it.
This has to be done within 2 years of the deaths of your Grandparents.
I would suggest a Solicitor should draw this up and could also advise on your other points.
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