Perhaps someone who knows the ins and outs of probate could advise me in a general way, though I will obviously get proper legal advice from the solicitor handling this probate, once that process nears completion. But for now I am just keen to understand the general principles involved.
I am acting as executor for a bachelor uncle who died down the country and has left his house to two of my nieces (his great nieces). They are sisters, the youngest (Sister A) living in America and the eldest (Sister B) living here. Initially I planned to sell the house on the open market and divide the proceeds between the sisters – after the tax man takes his 33% cut - their inheritance tax threshold is very low. However, Sister B is keen to try and buy the house, which is near a train station with a good service to Dublin, and her younger sister (A), while obviously keen to inherit a decent lump sum, is also keen to help her sister achieve the near impossible dream for her generation by getting a mortgage to buy a house in Ireland.
I would like to see this happen but am also aware of my legal responsibilities as an executor. So I have two questions.
1: When I had the property valued to start the process of probate, a local auctioneer gave me a relatively low value, as it is in poor condition. But more recently when I had two other estate agents look at it, both came back with far higher values, one radically higher than the other. Nobody can predict its true value market value until people start to bid on it, but I now have three totally contrasting values. The two sisters have agreed a price between them, that Sister B can afford to pay, and Sister A would be happy to sell her share for. This is higher than the initial valuation but lower than the more recent ones (which may be more accurate or may be estate agents trying to tout for business). If the sisters were inheriting it from a parent, the taxman would not be involved, as its value would be below that threshold. However, as the tax man will be looking for his 33% share when the sale is concluded, can the sisters simply agree between themselves on what they feel is an amenable and fair price, and pay the inheritance tax on this sum? Or can Revenue insist on any final sale price must be established by another independent valuation (which, because the three valuations so far have varied so much, might put it out of Sister B’s reach)?
2: If I let them agree a price between themselves that they are both happy with, am I correctly fulfilling my duties as an executor? The house was simply left to them: the will never states that I need to sell it and divide the proceeds. Also, if they decide that Sister B will buy out Sister A, should I simply pass the house over to them as soon as probate occurs and let them both get their own legal advice on the sale between them?
Once probate occurs, am I then essentially out of the picture, as I will have paid the solicitor handling my uncle’s probate and ensured that the initial inheritance due tax is fully paid? After that, is any Capital Gains tax that might arises, if the sale price agreed between them is higher than the initial probate value, a separate matter for them?
Maybe the answer to all these questions are simple, but I have a hunch that nothing involving wills and tax is ever simple.
I am acting as executor for a bachelor uncle who died down the country and has left his house to two of my nieces (his great nieces). They are sisters, the youngest (Sister A) living in America and the eldest (Sister B) living here. Initially I planned to sell the house on the open market and divide the proceeds between the sisters – after the tax man takes his 33% cut - their inheritance tax threshold is very low. However, Sister B is keen to try and buy the house, which is near a train station with a good service to Dublin, and her younger sister (A), while obviously keen to inherit a decent lump sum, is also keen to help her sister achieve the near impossible dream for her generation by getting a mortgage to buy a house in Ireland.
I would like to see this happen but am also aware of my legal responsibilities as an executor. So I have two questions.
1: When I had the property valued to start the process of probate, a local auctioneer gave me a relatively low value, as it is in poor condition. But more recently when I had two other estate agents look at it, both came back with far higher values, one radically higher than the other. Nobody can predict its true value market value until people start to bid on it, but I now have three totally contrasting values. The two sisters have agreed a price between them, that Sister B can afford to pay, and Sister A would be happy to sell her share for. This is higher than the initial valuation but lower than the more recent ones (which may be more accurate or may be estate agents trying to tout for business). If the sisters were inheriting it from a parent, the taxman would not be involved, as its value would be below that threshold. However, as the tax man will be looking for his 33% share when the sale is concluded, can the sisters simply agree between themselves on what they feel is an amenable and fair price, and pay the inheritance tax on this sum? Or can Revenue insist on any final sale price must be established by another independent valuation (which, because the three valuations so far have varied so much, might put it out of Sister B’s reach)?
2: If I let them agree a price between themselves that they are both happy with, am I correctly fulfilling my duties as an executor? The house was simply left to them: the will never states that I need to sell it and divide the proceeds. Also, if they decide that Sister B will buy out Sister A, should I simply pass the house over to them as soon as probate occurs and let them both get their own legal advice on the sale between them?
Once probate occurs, am I then essentially out of the picture, as I will have paid the solicitor handling my uncle’s probate and ensured that the initial inheritance due tax is fully paid? After that, is any Capital Gains tax that might arises, if the sale price agreed between them is higher than the initial probate value, a separate matter for them?
Maybe the answer to all these questions are simple, but I have a hunch that nothing involving wills and tax is ever simple.