Inherited Property

[MikeGrahamT21]

Hi,

 

Tried searching the web for an answer to this one and can't find anything relevant, but it must have happened previously.

 

When  my Mum died 8 years ago, me and Dad varied her will to put her half of the property in mine and my brothers name, leaving the remaining 50% in my dads name, all three of us are named on the title deeds at Land Registry. Dad died around a month ago, and since then i've sent the land registry form off to have his name removed from the title deeds, leaving just me and my brother as owners.

 

My question is, at this point are we legally allowed to put it on the market for sale, or do we need to wait for probate to come through? Dads 50% has been included in the IHT calculation, for which we are not liable.

 

Hoping someone has come across this before...

 

Cheers
Mike

[garrymartin]

So first off, regardless, you can legally put it on the market, but you might not be able to complete a sale until probate comes through.

 

However, because your names are on the title, my understanding is that you could legally sell the property before probate, but whether you could keep the proceeds in full would depend on your father's will and any conditions/allocations in the title itself that may prevent the sale.

 

I know we never like to spend money, but really your best course of action is to ask a solicitor and answer their specific questions. It shouldn't cost that much to get a qualified opinion and will set your mind at rest and allow your position to be very clear as you market and sell the property.

[IanR]

41 minutes ago, MikeGrahamT21 said:

Dad died around a month ago, and since then i've sent the land registry form off to have his name removed from the title deeds, leaving just me and my brother as owners.

 

How did you take your Dad's name off the Title Deed? If the ratios were 50:25:25, then was there a Declaration of Trust filed with the Title at LR? I'm not an expert, but assume you would have need to do an Assent from your father to you and your brother, rather than a Transfer. An Assent needs the Grant (I believe).

 

There's around a 6 month delay with LR at the moment for Assents and Transfers, have you received the completion documents from LR to show it has gone through?

 

With regards sale, are you the Executor to your Father's Estate? If so then I believe the Executor can sell the property (to collect monies for HMRC and Beneficiaries), but I don't believe you can pay out to the beneficiaries until Grant is received. ie. keep the money in an Executors account.) This maybe more relaxed if HMRC have agreed, via IHT400, that no IHT is owed.

Edited May 22 by IanR

[garrymartin]

Depends very much on the title and ownership.

 

If they were joint tenants, the property would have been owned in equal proportions between the three of them and there is a "survivorship destination" where the share of the property of the person who has died will be split equally between the two remaining owners. If this is the case, then there should be no issue with a sale as the father's share could not be left to someone in a will. The two brothers are now the joint tenants and own the property.

 

If they were tenants in common, the property could have been split differently (perhaps 50:25:25) and shares do not automatically transfer to the surviving owners. The father's share could have been left to someone else in his will.

[IanR]

9 minutes ago, garrymartin said:

(perhaps 50:25:25) 

 

Assumed from OP

 

1 hour ago, MikeGrahamT21 said:

me and Dad varied her will to put her half of the property in mine and my brothers name, leaving the remaining 50% in my dads name, all three of us are named on the title deeds at Land Registry.

 

[Alan Ambrose]

>>> are we legally allowed to put it on the market for sale, or do we need to wait for probate to come through?

 

Yes, you can put it on the market and any estate agent will be used to this situation. I think you can exchange, but you can't complete (memory fails me) - but check with your conveyancing solicitor.

 

[MikeGrahamT21]

3 hours ago, IanR said:

 

How did you take your Dad's name off the Title Deed? If the ratios were 50:25:25, then was there a Declaration of Trust filed with the Title at LR? I'm not an expert, but assume you would have need to do an Assent from your father to you and your brother, rather than a Transfer. An Assent needs the Grant (I believe).

 

There's around a 6 month delay with LR at the moment for Assents and Transfers, have you received the completion documents from LR to show it has gone through?

 

With regards sale, are you the Executor to your Father's Estate? If so then I believe the Executor can sell the property (to collect monies for HMRC and Beneficiaries), but I don't believe you can pay out to the beneficiaries until Grant is received. ie. keep the money in an Executors account.) This maybe more relaxed if HMRC have agreed, via IHT400, that no IHT is owed.

 

Indeed ratio was 50:25:25 with an exception that Dad could live there rent free, til the end of his life.

 

All i've done so far is send this form (https://www.gov.uk/government/publications/deceased-joint-proprietor-djp) along with a copy of the Death certificate (which they've since returned) to the land registry, and awaiting next steps, so it sounds like i'll need to do the Assent as a next step.

 

Both me and my brother are executors to the estate. I've ran everything through the IHT calculator on the gov website, and it states nothing is due.

 

No we didn't do any declarations of trust as part of it, a solicitor just did a variation of the will of my mother. Looking at the Assent form, thats getting a bit beyond my knowledge, so we will have to involve a solicitor in that to fill it out for us, but it does suggest that Probate needs to be completed before you can do it, so I'll ensure that gets submitted ASAP

 

3 hours ago, garrymartin said:

Depends very much on the title and ownership.

 

If they were joint tenants, the property would have been owned in equal proportions between the three of them and there is a "survivorship destination" where the share of the property of the person who has died will be split equally between the two remaining owners. If this is the case, then there should be no issue with a sale as the father's share could not be left to someone in a will. The two brothers are now the joint tenants and own the property.

 

If they were tenants in common, the property could have been split differently (perhaps 50:25:25) and shares do not automatically transfer to the surviving owners. The father's share could have been left to someone else in his will.

 

The will is a real simple one, basically everything that was Dads, goes to me and brother 50/50 split, but yes you are right, it was 50:25:25.

 

28 minutes ago, Alan Ambrose said:

>>> are we legally allowed to put it on the market for sale, or do we need to wait for probate to come through?

 

Yes, you can put it on the market and any estate agent will be used to this situation. I think you can exchange, but you can't complete (memory fails me) - but check with your conveyancing solicitor.

 

 

Good to know we can at least get the ball rolling on that front whilst the legals go through in the background, this was the main thing I needed to know to start off with.

[IanR]

58 minutes ago, MikeGrahamT21 said:

 

Indeed ratio was 50:25:25 with an exception that Dad could live there rent free, til the end of his life.

 

All i've done so far is send this form (https://www.gov.uk/government/publications/deceased-joint-proprietor-djp) along with a copy of the Death certificate (which they've since returned) to the land registry, and awaiting next steps, so it sounds like i'll need to do the Assent as a next step.

The DJP form is correct if the Title is set up as a Joint Tenancy, but then legally you wouldn't have declared the 50:25:25 ownership. If they become aware, HMRC may also question the rent-free aspect of your father living in a property that he didn't wholly own.

 

If the Title is set up as Tenants in Common, then a portion of the property remains in your Father's Estate and needs to be "Assented" to you and your brother. Unless there's something filed with the Title that states otherwise, the legal ownership would be 1/3:1/3:1/3 (not 50:25:25). Again HMRC may feel that your father living rent free in a portion of it that he didn't own could amount to a gift to you and your brother. Also, was the Deed of Variation made (of your mum's will) within 2 years of your mother's death? If not, that may also be considered a gift from your Father, and as it would have been within the 7 years of your Father's death may need to be included in your Father's IHT calculation. 

You probably shouldn't answer those questions on a forum, but you may want to take advice on your next steps...

[MikeGrahamT21]

6 minutes ago, IanR said:

The DJP form is correct if the Title is set up as a Joint Tenancy, but then legally you wouldn't have declared the 50:25:25 ownership. If they become aware, HMRC may also question the rent-free aspect of your father living in a property that he didn't wholly own.

 

If the Title is set up as Tenants in Common, then a portion of the property remains in your Father's Estate and needs to be "Assented" to you and your brother. Unless there's something filed with the Title that states otherwise, the legal ownership would be 1/3:1/3:1/3 (not 50:25:25). Again HMRC may feel that your father living rent free in a portion of it that he didn't own could amount to a gift to you and your brother. Also, was the Deed of Variation made (of your mum's will) within 2 years of your mother's death? If not, that may also be considered a gift from your Father, and as it would have been within the 7 years of your Father's death may need to be included in your Father's IHT calculation. 

You probably shouldn't answer those questions on a forum, but you may want to take advice on your next steps...

 

Yeah it was done around 3months following her death, so its around 8 years in total since it was varied.

 

I've just had a look at the title deed which the solicitor sent us, and to be honest there are no proportions listed, we are simply all named under Title Absolute, point 1, with both names and address. If this means that it is equally split then maybe that simplifies the process

 

I think the rent free bit may have been done in a different way... No disposition by a sole proprietor, so no one person can sell, unless authorised by a court it states. So i guess the authorised by a court would be probate?

[garrymartin]

3 minutes ago, MikeGrahamT21 said:

No disposition by a sole proprietor, so no one person can sell, unless authorised by a court it states. So i guess the authorised by a court would be probate?

Just means that one party can't sell without the other's knowledge and agreement. If you both agree to the sale, and are joint tenants, then you don't need court approval.

[MikeGrahamT21]

2 minutes ago, garrymartin said:

Just means that one party can't sell without the other's knowledge and agreement. If you both agree to the sale, and are joint tenants, then you don't need court approval.

 

Ahh yeah that makes sense.

 

Will see what land registry's response is and take it from there i guess, and crack on with probate as we need it anyway.

 

Thanks for your replies, and hopefully will help someone else out in future too!

[Alan Ambrose]

For about 6 quid, you can get copies online of the official registration docs for the property from the land registry. That's the 'official' position and should list type of joint arrangement / share proportions if there are any. Make sure you use the .gov site, not some fraudster.

 

You will need some kind of valuation for probate. I just used some online sources (Zoopla etc) but for not much money you can get an estate agent's valuation 'for probate'. Maybe they'll throw this in for free if they think they'll get a listing.

[MikeGrahamT21]

50 minutes ago, Alan Ambrose said:

For about 6 quid, you can get copies online of the official registration docs for the property from the land registry. That's the 'official' position and should list type of joint arrangement / share proportions if there are any. Make sure you use the .gov site, not some fraudster.

 

You will need some kind of valuation for probate. I just used some online sources (Zoopla etc) but for not much money you can get an estate agent's valuation 'for probate'. Maybe they'll throw this in for free if they think they'll get a listing.

yeah the solicitor sent us a copy of the title deed once he’d done the work so I’ve got it straight from the horses mouth as it were.

 

I’ve lived on this street all of my life and dads house is only a few doors down, so I’ve gone with a top end estimate based upon prices of others which have sold recently, even if it were another 50% higher than that it still wouldn’t touch IHT, primarily because he didn’t own the whole thing, and indeed may have only owned 33% given that no split is detailed on the title deeds.