Tenants in common to save CGT on deceased persons property

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    Tenants in common to save CGT on deceased persons property

    My mother has recently passed away leaving myself and my sister an unmortgaged 3 bed house worth about £200k.

    Unfortunately the house has subsidence caused by a neighbouring businesses' giant Leylandii trees that they won't cut down. The movement of the house and garage is currently being monitored by the insurance company. As a result the house is probably unmortgageable at the moment and we don't want to sell at auction for a fraction of the full market value. Therefore we are going to rent it out for 4 or 5 years until the property has recovered and is repaired and mortgageable.

    To minimise our possible future CGT liability would we be able to register the house in our names plus our spouses (ie four names)?

    I would be grateful for any help or advice on the CGT situation and dealing with the insurance company in the future to progress the claim and mitigate any losses we may incur. I have sent them a copy of the grant of probate.

    Many thanks for any help or advice

    #2
    a) There won't be CGT liability unless the price rises above the declared probate value

    b) Yes you can put in 4 names - this will allow the price to increase by about £45000 (4 CGT allowances) plus the cost of repairs and costs of sale/litigation -- if you are unlikely to sell it for more than about £230,000 it may not be worth the effort.

    c) It is not clear if this is part of probate or two of you already own it. If part of probate you will need a deed of variation or immediate gifting to spouses.

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      #3
      Make a complaint to Local Council about damage caused by Leylandii trees which some councils have imposed a height limit of 2m.

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        #4
        Yes do complain. But the height limit only applies if the trees are on your boundary. Other limits may apply under other circumstances.

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          #5
          Thanks for your replies.

          I was asking to reduce the possibility of CGT in the future because it is impossible to predict the boom and bust of the housing market. It's not improbable that house prices could exceed our allowance as we don't know how long we will keep the property, especially if we have a good tenant. It may go beyond 5 years so therefore I was enquiring if it was possible to easily/ legally split it four ways.

          My mum contacted the council about the trees but they weren't interested and she didn't chase it further. The trees are right on the boundary; one metre from the garage and 4-5 metres from the house and are well above the height of the gutter, getting on for roofline height. They are at least 40 years old and have been topped so are more like a huge hedge. They have sucked all the moisture out of the ground causing subsidence. The insurers have contracted a company to measure movement and dug sample holes to prove root penetration and it is now a case of waiting for the results/ evidence.

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            #6
            Originally posted by AndrewDod View Post

            c) It is not clear if this is part of probate or two of you already own it. If part of probate you will need a deed of variation or immediate gifting to spouses.
            The house has been left to my sister and I equally. I am the executor of the will. There is no deviation from the will as we will still be joint owners. What is the best way/ cheapest to register the property without incurring big legal fees. Do we have to register it between the 2 of us as per the will and then re-register after gifting it?

            Thanks

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              #7
              You can do the necessary landregistry forms yourself - no involvement of solicitors other than to verify your ID. If you call the landregistry, they will tell you which forms to complete and then if you go onto their website, there is often a video tutorial telling you how to complete the forms. I've recently done a transfer of equity on a mortgage free property. I didn't find it difficult at all.

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                #8
                Claymore, I want to do a transfer myself. The point at which I got stuck is on the signing of the form as a non-conveyancer. It seemed to me that there was a huge convoluted procedure involved which probably entails having to visit HMLR in person. How did you do this?

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                  #9
                  Andrew, my forms involved AP1, TR1 and an ID1. I didn't have any issues with signing, without digging out my copies, I recall I just declared on the form that I was doing the conveyancing and listed all my contact details including email address. There was an online video on the the gov website that went through how to complete all the boxes. If you aren't planning a visit to your local landregistry, a firm of solicitors will complete your ID1 form for a small fee of £5. Then you simply post them off when completed.

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