Will and house legal fees question??
Discussion
Wondering if any kind Phers in the legal profession could give some pointers on the following.
Situation - dad recently died, mum died 1991. Will (written years ago but in our possession) says £600k house will go half each to myself and my brother. There are no other monies involved and the contents of the house not worth much, no Picassos hanging about.
Would it be safe to assume that there is no IHT to consider, as in allowances of £325k + £325k (£650k)?
One of us is going to keep the house and pay the other his share, is there any way around paying stamp duty?
Is the paperwork to do it any simpler/cheaper than if you are just buying a house in any other circumstances, ie can you just send the "log book" back for a change of ownership as it is all in house rather than a normal long winded purchase with searches etc?
Assuming we are talking about two separate jobs (?), what could we expect to pay fees wise to a legal person for firstly dealing with the will and secondly dealing with the house ownership transfer/purchase? Or is it really just all one job and roughly how much should that be in total?
Would like to use the family solicitor because I know my dad would want us to, but would like to have a ball park figure for fees in mind when we go there as I know they have taken liberties in the past.
Many thanks in advance for any input
Situation - dad recently died, mum died 1991. Will (written years ago but in our possession) says £600k house will go half each to myself and my brother. There are no other monies involved and the contents of the house not worth much, no Picassos hanging about.
Would it be safe to assume that there is no IHT to consider, as in allowances of £325k + £325k (£650k)?
One of us is going to keep the house and pay the other his share, is there any way around paying stamp duty?
Is the paperwork to do it any simpler/cheaper than if you are just buying a house in any other circumstances, ie can you just send the "log book" back for a change of ownership as it is all in house rather than a normal long winded purchase with searches etc?
Assuming we are talking about two separate jobs (?), what could we expect to pay fees wise to a legal person for firstly dealing with the will and secondly dealing with the house ownership transfer/purchase? Or is it really just all one job and roughly how much should that be in total?
Would like to use the family solicitor because I know my dad would want us to, but would like to have a ball park figure for fees in mind when we go there as I know they have taken liberties in the past.
Many thanks in advance for any input
elanfan said:
Not a legal professional but your Dad inherited your Mum's share therefore his personal threshold is £325K therefore you will be paying IHT on the balance. I don't know where you get £325K + £325K from unless your Mum left her share to you when she died.
IIRC any percentage of the OP's Mum's remaining unused nil rate band can be added to Dad's nil rate band (presuming they were married).Firstly, sorry for your loss.
Checked with the missus who is a probate specialist. The law changed in 2007 so your dad's estate now automatically benefit's from having nil rate band exemption in place. So you get £325k from your's mum's estate plus £325k from your dad's estate exempt from IHT.
Please note thought, the IHT threshold is based on the value of the estate, not the value of the amount you inherit.
Hope that helps.
Checked with the missus who is a probate specialist. The law changed in 2007 so your dad's estate now automatically benefit's from having nil rate band exemption in place. So you get £325k from your's mum's estate plus £325k from your dad's estate exempt from IHT.
Please note thought, the IHT threshold is based on the value of the estate, not the value of the amount you inherit.
Hope that helps.
mdglen said:
The law changed in 2007 so your dad's estate now automatically benefit's from having nil rate band exemption in place. So you get £325k from your's mum's estate plus £325k from your dad's estate exempt from IHT.
Thanks - that was my understanding, as mentioned above nothing else of any worth to consider so the house is in effect the "estate".Anyone got any thoughts on the fees question above?
With regard to fees, obviously every case depend on its circumstances, but a very rough estimate would be around 1% of the value of the estate. That would cover a basic grant of probate and transfer/sale of the house.
However, there is lot of variation between providers. Some banks will charge 4% to handle probate, so do shop around.
However, there is lot of variation between providers. Some banks will charge 4% to handle probate, so do shop around.
mdglen said:
However, there is lot of variation between providers. Some banks will charge 4% to handle probate, so do shop around.
By all means shop around, but never EVER appoint a bank as an executor or to handle probate. For starters their charges are a total rip off. Secondly their level of service is usually appalling. The testator is out of the picture and whoever inherits the estate is just a number to them.I would be getting proper legal advice that stamp duty does not apply to sale of half the property to the other beneficiary. Transfers of property in a will are exempt but the subsequent sale of half is the bit you need to be sure of.
You also need to know what happened in 1991 in the Dad's will, the transfer of the nil rate band does depend on what happened then, particularly if he did anything other than leave everything to your mother who, one assumes, was his wife. (Not trying to be insulting, but if they weren't married it doesnt apply)
You also need to know what happened in 1991 in the Dad's will, the transfer of the nil rate band does depend on what happened then, particularly if he did anything other than leave everything to your mother who, one assumes, was his wife. (Not trying to be insulting, but if they weren't married it doesnt apply)
Sir Bagalot said:
So one is buying the other out.
By mortgaging the property or not?
If not then a simple LR1 and TR1 from the land registry will do the trick. Land registry fee and SD payable.
If mortgage involved then mortgage firm will insist on solicitor
To clarify, the fees would be based on no mortgage or additional work in that area.By mortgaging the property or not?
If not then a simple LR1 and TR1 from the land registry will do the trick. Land registry fee and SD payable.
If mortgage involved then mortgage firm will insist on solicitor
So ball park figures on that basis.
Can I ask what LR1 and TR1 are?
You will also need to check under what basis the house was owned when you mum was alive. If your mum and dad were joint tenants then the house would have passed straight to your dad and therefore wouldn't have used any of her allowance, that allows you to make use of it now.
However if they were somehow tenants in comment then some of that allowance may have been used as they would each have used a share in the house and that share would need to be valued and taken off your mums IHT allowance.
Sorry for your loss by the way.
However if they were somehow tenants in comment then some of that allowance may have been used as they would each have used a share in the house and that share would need to be valued and taken off your mums IHT allowance.
Sorry for your loss by the way.
mathmos said:
You will also need to check under what basis the house was owned when you mum was alive. If your mum and dad were joint tenants then the house would have passed straight to your dad and therefore wouldn't have used any of her allowance, that allows you to make use of it now.
However if they were somehow tenants in comment then some of that allowance may have been used as they would each have used a share in the house and that share would need to be valued and taken off your mums IHT allowance.
Sorry for your loss by the way.
Err, why does that matter in this case? Years ago, sure, but under today's rules?However if they were somehow tenants in comment then some of that allowance may have been used as they would each have used a share in the house and that share would need to be valued and taken off your mums IHT allowance.
Sorry for your loss by the way.
uknick said:
Siscar said:
Err, why does that matter in this case? Years ago, sure, but under today's rules?
The rules today are that any "unused" element of the spouses allowance is transferable, not necessarily the whole amountSo Mother died in 1991. At that time if everything went to the Father then, assuming they were married, there was no IHT to pay.
On recent death of the Father then the Mother's nil band can be carried forwards making £650k now.
The provisos are:
1. Where they married? If no then none of this applies
2. Did the mother leave everything to the father? If not then anything she left to anyone else comes off her IHT nil rate band allowance that can be carried forwards.
Unless I'm sadly missing something how the house was held makes no difference to this assuming they were married and she left everything to him.
Ok, I don't claim to be an expert...but my understanding of it is that just because they were married and the mum may have left everything to the dad, doesn't mean it's not liable for IHT.
Anything held jointly (joint bank accounts, house held as joint tenants etc) could pass directly to the dad with no IHT allowance being used.
Anything held in the mothers own name as sole assets (own bank accounts, property in her name etc) or anything she legally part owned (tenants in common on their own house) would use her IHT nil band allowance in any transfer of ownership through a will. If they were tenants in common, and they had set it up as say 50/50 ownership then the 50% she owned that she willed to her husband would be liable for IHT and would then use part of her nil band rate allowance and would therefore reduce how much could be transferred to her husband for use when he passed away.
Anything held jointly (joint bank accounts, house held as joint tenants etc) could pass directly to the dad with no IHT allowance being used.
Anything held in the mothers own name as sole assets (own bank accounts, property in her name etc) or anything she legally part owned (tenants in common on their own house) would use her IHT nil band allowance in any transfer of ownership through a will. If they were tenants in common, and they had set it up as say 50/50 ownership then the 50% she owned that she willed to her husband would be liable for IHT and would then use part of her nil band rate allowance and would therefore reduce how much could be transferred to her husband for use when he passed away.
mdglen said:
Firstly, sorry for your loss.
Checked with the missus who is a probate specialist. The law changed in 2007 so your dad's estate now automatically benefit's from having nil rate band exemption in place. So you get £325k from your's mum's estate plus £325k from your dad's estate exempt from IHT.
Please note thought, the IHT threshold is based on the value of the estate, not the value of the amount you inherit.
Hope that helps.
This is my understanding of the situation from personal experience. If the estate is the house plus perhaps some cash in the bank, then I'd be tempted to apply for grant of probate myself. You'd need a valuation of the property from an estate agent and a valuation of any furniture and personal effects.Checked with the missus who is a probate specialist. The law changed in 2007 so your dad's estate now automatically benefit's from having nil rate band exemption in place. So you get £325k from your's mum's estate plus £325k from your dad's estate exempt from IHT.
Please note thought, the IHT threshold is based on the value of the estate, not the value of the amount you inherit.
Hope that helps.
mathmos said:
Ok, I don't claim to be an expert...but my understanding of it is that just because they were married and the mum may have left everything to the dad, doesn't mean it's not liable for IHT.
Anything held jointly (joint bank accounts, house held as joint tenants etc) could pass directly to the dad with no IHT allowance being used.
Anything held in the mothers own name as sole assets (own bank accounts, property in her name etc) or anything she legally part owned (tenants in common on their own house) would use her IHT nil band allowance in any transfer of ownership through a will. If they were tenants in common, and they had set it up as say 50/50 ownership then the 50% she owned that she willed to her husband would be liable for IHT and would then use part of her nil band rate allowance and would therefore reduce how much could be transferred to her husband for use when he passed away.
No, everything left to the spouse is exempt of IHT and has been since the mid 1970's.Anything held jointly (joint bank accounts, house held as joint tenants etc) could pass directly to the dad with no IHT allowance being used.
Anything held in the mothers own name as sole assets (own bank accounts, property in her name etc) or anything she legally part owned (tenants in common on their own house) would use her IHT nil band allowance in any transfer of ownership through a will. If they were tenants in common, and they had set it up as say 50/50 ownership then the 50% she owned that she willed to her husband would be liable for IHT and would then use part of her nil band rate allowance and would therefore reduce how much could be transferred to her husband for use when he passed away.
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