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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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My 2 brothers and i have inherited my late mothers house valued

Resolved Question:

My 2 brothers and i have inherited my late mother's house valued at roughly £230,000. My youngest brother still lives in the house. 4 years ago my mother and brother took out a mortgage for £25,000 over 3 years to clear debts and paid equally. The Title deed now has them as Tenents in Common. My Mother's will states that my youngest brother gets half the house and my other brother and i get a quarter each. The rest of the estate is less than £5,000 max. I understand that my mother's wishes are not exact in law because she has mistakenly said half, quarter, quarter of the whole house when she can legaly only bequeth half of the house as a tennent in common. At present all brothers agree that our motheer meant the division of the whole house.

My main concern is that my youngest brother wouldd like to continue living in the house but as he is on a low income he will be unable to buy out our shares whether a quarter or an eight each. am i right in believing that if we sell the house now and spilt the proceeds as agreed we are all clear of inheritance tax and capital gains tax. However if our brother continues to live in the house he will be clear of Inheritance tax and capital gains tax whereas my other brother and i will be liable to capital gains tax on our share and any appreciation in value over time if we have the Title deeds changed to reflect our shares in the house. Kind regards,

Paul
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello Paul,

Yes, that is quite correct as your youngest brother will get personal home relief on the property whereas you and your other brother will not for capital gains purposes.

There is no inheritance tax payable as the value of the estate is below the IHT threshold.

However, your mother can only Will away her share of the property, if she owned it in equal shares with your brother, your mothers share would only be half of the property to be inherited as per her Will I..e half of her share to your youngest brother and quarter share of her half to you and your other brother.

Capital gains tax will only be payable if your inherited share in the property is sold, subject to any reliefs.

Hope this helps
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