Disclaiming inheritance - where does it go?

[legal33]

Hi,

If the wording of a Will says " I give my house to my brothers Jim and Tim in equal shares ", and if Jim disclaims, will Tim automatically inherit 100% of the house or will Jim's share go to other beneficiaries that are mentioned in the residue?

Thanks

 

[AAAContributor]

will Jim's share go to other beneficiaries that are mentioned in the residue?

Yes, I think so.

If it is a specific legacy under a Will, it falls into the residue of the estate.

See Point#5 in the section 'Disclaimers - 10 points to remember' on page 2 here.

 

[legal33]

Thanks,

I was probably getting confused with the situation where if Jim and Tim were joint owners, then on the death of one, the house would pass automatically to the other. There's something about a difference between joint tenants and tenants in common there but no need to go into that.

 

[TomEdison]

Jim can do it either way — he can disclaim his interest absolutely, or he can disclaim it in favour of Tim.

 

[legal33]

So if Jim disclaimed absolutely, his half would go to the residue. If Jim disclaimed in favour of Tim, then Tim would inherit 100% but would Tim have to pay gift tax on his half from Jim and also inheritance tax on both halves because isn't there a rule about a transfer between beneficiaries within 3 years of grant of probate is also seen as an inheritance from the deceased?

For simplicity I'm assuming that CAT thresholds have been previously exceeded.

I suppose Tim could purchase Jim's half from him and then there would be no gift tax on the transfer?