Crosswords1 min ago
'Appropriating' a property from estate
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In a recent Money Mail question, the correspondent was asking about a property which she and her brother had inherited from their mother and was now let. Her brother now wanted to sell, but she wanted to retain the property, perhaps by 'buying him out'.
Part of the reply included this text: "She told me the simplest method would be for you and your brother to ‘appropriate’ — or transfer — the property out of the estate if you have not already done so."
I am in a similar situation - although the property is not let. My sister has been living in it since my mother's death, and I expect to be living in it shortly as my primary residence, so the capital gains aspects should not arise. However, as the property is still technically part of the estate, and probate has not therefore been concluded, I am interested in this idea of 'appropriating' the property out of the estate, so that we can put that aspect to bed.
Is there somebody that can give me accurate and detailed information on this topic?
Part of the reply included this text: "She told me the simplest method would be for you and your brother to ‘appropriate’ — or transfer — the property out of the estate if you have not already done so."
I am in a similar situation - although the property is not let. My sister has been living in it since my mother's death, and I expect to be living in it shortly as my primary residence, so the capital gains aspects should not arise. However, as the property is still technically part of the estate, and probate has not therefore been concluded, I am interested in this idea of 'appropriating' the property out of the estate, so that we can put that aspect to bed.
Is there somebody that can give me accurate and detailed information on this topic?
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What the term means is the transfer of a particular asset (in this case the asset would be the property) by the personal representative of the estate (normally the executor) to a beneficiary under the terms of the will, in order to satisfy the legacy in the will of the deceased. It is an alternative to paying (part of) the legacy in cash. The right of the personal representative to appropriate is conferred by section 41 of the Administration of Estate Act 1925.
You will now see that a couple of questions arise.
1) Who is the executor of the estate? - you?
2) Was the property specifically left to you in the will? If not, I know of no reason why the executor could not appropriate the property to you - the value of the property appropriated would have to be agreed between the parties though the value already established for probate purposes seems right.
3) Why is the sister in the property at all (unless she was already in it and living with her mother prior to the death).
CGT doesn't come into it for you, and it only potentially applies to the estate of the deceased in the event that the asset (the property) has enhanced in value since the valuation established for probate purposes. Even then, the estate of deceased is entitled to the same 'annual allowance' of capital gain of just over £10k that an individual is entitled to.
You will now see that a couple of questions arise.
1) Who is the executor of the estate? - you?
2) Was the property specifically left to you in the will? If not, I know of no reason why the executor could not appropriate the property to you - the value of the property appropriated would have to be agreed between the parties though the value already established for probate purposes seems right.
3) Why is the sister in the property at all (unless she was already in it and living with her mother prior to the death).
CGT doesn't come into it for you, and it only potentially applies to the estate of the deceased in the event that the asset (the property) has enhanced in value since the valuation established for probate purposes. Even then, the estate of deceased is entitled to the same 'annual allowance' of capital gain of just over £10k that an individual is entitled to.
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