Buyout of share of house

[Levy]

If a property is willed to a number of people, and one of them wants to buy all the others out, are the payments made to each person subject to tax, or are they still viewed as inheritance?

 

[mf1]

If a property is willed to a number of people, and one of them wants to buy all the others out, are the payments made to each person subject to tax, or are they still viewed as inheritance?

Very often depends on the particular circumstances. Normally done by way of a Deed of Arrangement where purchaser buys out others and stamp duty is paid by purchaser ( possibly at a reduced rate if there is a blood relationship) on the others' shares. Depending on price paid there may be some CAT or CGT involved. Can also in limited circumstances be dealt with by way of Disclaimer. Great care is needed with that.

It is worthwhile getting legal/tax advice specific to the individual circumstances.

mf

 

[jpd]

I was executor of a will two years ago in the same circumstances. The house was sold to one of the beneficiaries by the estate and then the proceeds divided up amongst the beneficiaries. As the house was sold about 12 months after the date of death and the estate did not incur any CGT. No payments were made by the different beneficiaries to the purchaser and the purchaser paid the estate the value of the house less his entitlement.

The house must be valued at market value, of course - we got three valuations and a value was agreed by all of the beneficiaries.

 

[Levy]

Thanks for the help