Who 'owns' a house when the registered owner dies

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Andarma

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Parent died 10 years ago and left everything to 4 children, including a house. The house has never been transferred into the names of the children - land registry search shows deceased parent as owner. Eldest sibling is executor of will and funds from insurance policy and savings accounts were distributed a number of years ago, so presumably probate was done.

1 sibling is trying to buy the others out at the moment, and solicitor has raised issue of NPPR. Youngest sibling lived in house for 9.5 years after parent's death and paid no rent. Eldest sibling (executor) lives within 2km of house. Other 2 siblings live further afield and are fearful that NPPR may apply now, but the house has never actually been in their names.

To complicate things further, another individual, unrelated to the siblings, was given the right in the will to live in the house. He doesn't currently live in the house, but this right hasn't been rescinded yet.

So who actually 'owns' the house at the moment - is it the executor?
 
I assume that your main problem is who is liable for the NPPR.

This charge applied from 2009 to 2013.

Subsection 4(7) of the Act deals with the position of a personal representative in the case of the death of an owner.

It specifies that if a person who is the sole owner of a property dies in any year before the liability date in that year, then his or her personal representative is not liable to pay the charge until a grant of representation - i.e. either probate or letters of administration - is issued.

Subsections 6(3), (4), (5), (6) and (7) further provide that if a charge or late payment fee (or any part of a charge or fee) is unpaid at the time of the person’s death, no further late payment fee is payable until a grant of representation issues i.e. the amount owing is in effect frozen.

When a grant of representation issues, the full amount owed by the deceased person becomes payable by the personal representative and if paid within 3 months from the date of issue of the grant of representation, no further liability accrues.

However, if the full amount is not paid within the 3 month period, late payment fees accrue from the date of issue of the grant of representation.
 
Thank you both. If the executor is liable for the NPPR, then presumably the exemptions under the Act apply to them, specifically the one that exempts the charge where a family member lives in the house rent-free and the owner lives within 2km of the property? This is the case for the executor.
 
The property is currently part of your father’s estate. Any NPPR due would be chargeable on the estate.

From what you say, it appears that all 4 siblings have an absolute interest in the residue of your father’s estate.

One sibling lived rent-free in the house. Was this his or her sole residence during the period of occupation?

I assume the other siblings had other properties in use as their principal private residences.

What does the solicitor say regarding NPPR?
 
It's the mother's estate, father is still alive and well (they were divorced).

The sibling who lived in the house rent-free for 9.5 years after the death has no other property and is currently renting elsewhere. All the other siblings have their own homes. Executor sibling lives in the same town as the inherited property.

There's also the issue of the person who was given the right in the mother's will to live in the house, which he did for a number of years alongside the youngest sibling. The solicitor for the sibling who wants to buy the house has said that this has to be formally rescinded, otherwise the person named in the will could decide to return to the house at any time.

I don't know precisely what the solicitor has said about the NPPR - executor is dealing with it, but I get the impression that it has been raised as a standard issue to be resolved.

When the NPPR was first introduced I did investigate it and I was confident that we were exempt from it, not so confident now!
 
Andarma,

I may be totally wrong - and in a way I hope that I am – but I think the two siblings, who neither lived in the property nor within 2 kilometres of the property may have a joint NPPR liability, which would be payable out of the estate.

Having trawled the legislation, I cannot find a reason why they would be exempt.

The executor really needs to seek legal advice.
 
Sophrosyne said:
Andarma,

I may be totally wrong - and in a way I hope that I am – but I think the two siblings, who neither lived in the property nor within 2 kilometres of the property may have a joint NPPR liability, which would be payable out of the estate.

Having trawled the legislation, I cannot find a reason why they would be exempt.

The executor really needs to seek legal advice.
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Thanks for that, I hope you're wrong too (can you guess which of the siblings I am!). I thought there was an exemption if someone had the right of residence in the house, but I'm having trouble finding it in the legislation. It seems crazy to me that 2 of us might be liable and the other 2 aren't, despite the fact that the house has never been in our names and we couldn't live in it or sell it because of the right of residency granted to the third party and because the youngest sibling refused until recently to move out and consider selling up.
 
Andarma,

Although not expressly stated in the act, the right of residence of the other party may preclude you and your siblings from satisfying the definition of “owner”.

The right of residence would have to be exclusive.

That is the main reason why I think the executor should seek legal advice.
 
Monbretia said:
Could the person with the right of residence not be considered the 'liable' person though?
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I wouldn't think so. If the residence is their primary residence then they can't be liable for the NPPR (which is for non principal primary residences)
 
You're right, I was thinking of the LPT! wrong tax, there are so many these days I'm getting confused :)
 
The original act did not fully take account of residuary beneficiaries. One of the unintended consequences was that when they eventually took possession a retrospective NPPR charge including late payment fees could arise.

The act was amended to place responsibility for payment on the personal representative in order to avoid those fees.

It is in that sense that a personal representative becomes the “owner”.

Obviously, personal representatives cannot be “owners” in relation to exemptions.

In your case, the executor happens to be a beneficiary, with possible entitlement to an exemption.

What if the executor was a solicitor?
 
Sophrosyne said:
The original act did not fully take account of residuary beneficiaries. One of the unintended consequences was that when they eventually took possession a retrospective NPPR charge including late payment fees could arise.

The act was amended to place responsibility for payment on the personal representative in order to avoid those fees.
Click to expand...

Is that Subsection 4 (7) that you quoted above? That doesn't seem to apply in our case, as our mother died 5 years before NPPR was introduced and probate was in 2006 or so.
 
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