Nicola Steadman, of THW private client department writes:
As a solicitor, I get asked a lot about transferring property to children who have benefited under their parents’ wills.
Understandably, when children have grown up in a house and they are left it in their parents’ will, they may wish to retain it if at all possible.
There are several benefits of doing this, but also many, many pitfalls.
There are several things to consider:
- Joint Ownership - It is important that each child who receives a share in a property ensures that they own as Tenants in Common if they wish it to pass to their own children in due course.
- Disputes – If one party thinks work and improvements need doing to the property, but the other co-owners disagree.
- Selling the Property - If one party wants to sell and the other cannot raise the funds to buy the property out, a Court application to order the sale may be required, which is expensive and time consuming.
- Tax Issues – This can include Income Tax from rental payments, but also Inheritance Tax on the owner’s death. There may also be Capital Gains Tax to pay, but this is outside the remit of this article. Please do contact us if you would like further advice on this particular issue.
However, having said all of this, if siblings get on, there can be a great advantage of having the property still within the family as a family heirloom.
Many beneficiaries see the benefit of selling the property
straight away and this often what happens, but renting the property out for an
income is certainly worth considering. However, do remember that renting a property out comes with
responsibilities to the tenant, and it is vital that you have follow all the
correct procedures to avoid problems in the future. Using a reputable
Letting Agent can help avoid such problems.
For more information or advice on the above issues please contact Nicola on 01539 721945 or by email Nicola.Steadman@thwlegal.co.uk
Published 3 June 2020
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