Q&As

What transfer options are available where a property is inherited by three beneficiaries, one of whom wishes to buy out the other two? What SDLT consequences may there be for the beneficiary buying out the other two, if that beneficiary owns another property?

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Produced in partnership with Kirstie Danton of St Ives Chambers
Published on LexisPSL on 20/10/2016

The following Private Client Q&A produced in partnership with Kirstie Danton of St Ives Chambers provides comprehensive and up to date legal information covering:

  • What transfer options are available where a property is inherited by three beneficiaries, one of whom wishes to buy out the other two? What SDLT consequences may there be for the beneficiary buying out the other two, if that beneficiary owns another property?
  • Valuation of the property
  • Stamp duty land tax

What transfer options are available where a property is inherited by three beneficiaries, one of whom wishes to buy out the other two? What SDLT consequences may there be for the beneficiary buying out the other two, if that beneficiary owns another property?

It is fairly common for property to be left to a number of beneficiaries. In many cases this will result in the beneficiaries wishing to sell the property in order to release in liquid form the capital represented by their inheritance. Where the property is occupied by one of the beneficiaries, or where one wishes to take on the property, that beneficiary may wish to purchase the interest of the others.

How this can best be achieved depends upon timing. The beneficiary can approach the estate to purchase the property, which would result in the release of cash equal to two thirds of the value of the property and would have the benefit that the property could simply be transferred into the name of the purchasing beneficiary. An alternative, if there are sufficient other assets in the estate to compensate the other beneficiaries, would be to enter into a deed of variation (in effect, altering the terms of the will) to provide that the property goes to the beneficiary who wishes to retain it, with the other beneficiaries being compensated through other estate

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