inheritance and capital gains tax.
Discussion
In 1995 our parents put my and my brothers name on the deeds of their modest house, as well as setting up some kind of trust, making us trustees and giving us enduring power of attorney.
Unfortunately the time has come to execute the will.
Am I correct in thinking that the trust will sell the property, then pay us out, meaning that we will each lose the tax free element of the capital gain?
Unfortunately the time has come to execute the will.
Am I correct in thinking that the trust will sell the property, then pay us out, meaning that we will each lose the tax free element of the capital gain?
oldnewbie said:
In 1995 our parents put my and my brothers name on the deeds of their modest house,
There are several ways of doing this, with many different implications.oldnewbie said:
as well as setting up some kind of trust,
...and their must be dozens of variations of this theme.Without precise details, probably needing specialist legal advice, I think your questions are unanswerable.
Would go and get proper legal advice, i'm sure there are some very good legal eagles even solicitors and barristers on here but would't take everything on here as gospel
Know someone who made a right pigs ear of things
so instead of getting over million between two sons
they got shafted and ended up getting £227k just over £100k each after fees etc
Know someone who made a right pigs ear of things
so instead of getting over million between two sons
they got shafted and ended up getting £227k just over £100k each after fees etc
Siscar said:
Well it's kind of hard from the info to know what to say. Trusts are complex, it depends what they say and when executed. Assuming that they reserved the use of the items, such as the house, that has an impact but so does the total amount in question.
My parents did reserve use, property value approx £160k.Sorry detail a bit thin should get more detail next week but naturally curious.
We are talking parents here so assuming one died and then the other and that the first left their estate to the second (assuming they were married) we are talking about £650k in total before tax kicks in.
Meanwhile a trust where benefit is retained isn't much use, assets only leave the estate when the true ownership of the asset moves on although the timing of the trust does matter there, back in the 80s they were a valid option.
Meanwhile a trust where benefit is retained isn't much use, assets only leave the estate when the true ownership of the asset moves on although the timing of the trust does matter there, back in the 80s they were a valid option.
IANAL but the missus is, and she specialises in Private client work. Her answer is:-
"Consulting a forum does not replace the considered advice that a qualified solicitor who specializes in the relevant area of law would provide." (But then she has to says that.)
Also, the deceased gets an uplift for CGT purposes to the date of death value, so CGT is only payable from any increase from the data of death, and there are ways of saving that as well.
Hope that answers your question.
"Consulting a forum does not replace the considered advice that a qualified solicitor who specializes in the relevant area of law would provide." (But then she has to says that.)
Also, the deceased gets an uplift for CGT purposes to the date of death value, so CGT is only payable from any increase from the data of death, and there are ways of saving that as well.
Hope that answers your question.
oldnewbie said:
My parents did reserve use, property value approx £160k.
Sorry detail a bit thin should get more detail next week but naturally curious.
What was the total estate worth?Sorry detail a bit thin should get more detail next week but naturally curious.
There are no CGT issues and unless the total inheritance was over £325k it's unlikely that there are any IHT issues.
Update, for benefit of all who offered advice.
This morning spoke to solicitor who set up the Trust, he says it is all straightforward, as me and brother were added to deeds previously, property now belongs to me and brother, no CGT applicable as uplift on death applies.
Thanks again for advice and comments.
Would appreciate further advice on new issues following on from the above.
Unfortunately my brother and me do not get on, I have tried to get him to cooperate with me even if it is just to clear up the estate [as joint executors and beneficiaries] but he will not speak to me on the phone or answer texts.
He has e mailed the solicitors, who he has also fallen out with, to inform them that he will be instructing another solicitor in due course [he is away on extended holiday, for how long no none knows] At this time until he signs the necessary forms to release the will I can do nothing.
My question is, as it seems to me to now be a straightforward exercise to obtain probate and then split the assets 50/50, if he insists on instructing a solicitor, can I act for myself and insist he pays any legal fees he incurs himself, or can he set these costs against the estate before the 50/50 split?
This morning spoke to solicitor who set up the Trust, he says it is all straightforward, as me and brother were added to deeds previously, property now belongs to me and brother, no CGT applicable as uplift on death applies.
Thanks again for advice and comments.
Would appreciate further advice on new issues following on from the above.
Unfortunately my brother and me do not get on, I have tried to get him to cooperate with me even if it is just to clear up the estate [as joint executors and beneficiaries] but he will not speak to me on the phone or answer texts.
He has e mailed the solicitors, who he has also fallen out with, to inform them that he will be instructing another solicitor in due course [he is away on extended holiday, for how long no none knows] At this time until he signs the necessary forms to release the will I can do nothing.
My question is, as it seems to me to now be a straightforward exercise to obtain probate and then split the assets 50/50, if he insists on instructing a solicitor, can I act for myself and insist he pays any legal fees he incurs himself, or can he set these costs against the estate before the 50/50 split?
Firstly I feel for you having just lost one of my parents.
I recently was an executor for another estate where I had to obtain probate, all I got the Solicitor to do was that. I dealt with everthing else, selling property etc and their bill was about £700, not the thousands I was nervously expecting. I am not sure if that was cheap or expensive but it was less than I had imagined it would be.
All expenses I incurred after the death were not covered by the estate for instance I could not deduct the solicitors fees from the value of the estate or the rates and maintenance charge of the flat involved. I appreciate you have the unfortunate scernario of being at logger heads with your brother, however, if for instance Probate is assigned to him only by his solicitor you may not have such a large half share to settle if it means you can resolve this situation. Not being qualified legally if the will asks for both of you to be executors, I imagine the probate would have to follow that format too anyway.
Good luck with resolving the sitaution.
I recently was an executor for another estate where I had to obtain probate, all I got the Solicitor to do was that. I dealt with everthing else, selling property etc and their bill was about £700, not the thousands I was nervously expecting. I am not sure if that was cheap or expensive but it was less than I had imagined it would be.
All expenses I incurred after the death were not covered by the estate for instance I could not deduct the solicitors fees from the value of the estate or the rates and maintenance charge of the flat involved. I appreciate you have the unfortunate scernario of being at logger heads with your brother, however, if for instance Probate is assigned to him only by his solicitor you may not have such a large half share to settle if it means you can resolve this situation. Not being qualified legally if the will asks for both of you to be executors, I imagine the probate would have to follow that format too anyway.
Good luck with resolving the sitaution.
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