Severing a Joint Tenancy

U

UncleSean

Guest
Just wondering if someone can help me.
My niece owns a property under joint tenancy with her granduncle and grandfather. They have been joint tenants for the last 15 years. Unfortunately her granduncle passed away earlier this year and we are now in the process of trying to deal with his legal affairs. Her grandfather has indicated that he would have no problem in transferring his share of the property to my niece now, if she would prefer this, as ultimately it will be hers anyway and with probable CAT tax increases etc it might be better to do it sooner rather than later. So my questions are as follows….

What is the process to be followed :1. break joint tenancy, 2. one person own it fully, so CAT, stamp duty and gift tax and probably CGT is involved in the transaction. Does a ‘Withdrawl of Name Application’ form with the Land Registry need to be completed for the dead granduncle and the grandfather?

Is there any benefit in waiting for the survivorship rule to kick in for my niece (assuming of course she will be the survivor). I am thinking none as it would be better to move now and let her grandfather give it to her as I am sure the 25% gift tax/ inheritance tax may be increased in 2011 budget and other subsequent ones thereby increasing her tax bill.

If there is an increase in the budget for gift tax, when does this take effect?

I aware that this legal transaction should be, andwill be, performed by a trained and qualified solicitor, however I would like to personally oversee and understand fully the transaction prior to the solicitor guiding her direction!

Many Thanks
 
I'm not going to touch the tax aspect, but from the legal perspective there is no need to sever the joint tenancy. The death of the granduncle automatically means that your niece and grandfather now hold as joint tenants by survivorship, and similarly, if the grandfather dies, your niece will take the property as sole owner. This is automatic by operation of law, and occurs on the death of a joint tenant. This means that the property does not form part of the estate of the grand uncle, so the only thing that needs to be done with the property at the moment is to remove his name via a withdrawal of name application. It's not even strictly necessary to do that, as ultimately your niece can just deal with the property as surviving owner (assuming she is the survivor).

If the grandfather wants to give/sell his interest to your niece now rather than waiting, then it will have to be done by way of transfer (withdrawal of name won't work), and there may well be CGT and Stamp Duty implications.
 
Your niece would have acquired a 1/6 interest in the property on the death of her grand uncle. This will be subject to CAT so Class B threshold 41,481 applies. No CGT or stamp duty on death.
Next question is the gift of a 50% share grand father to niece. CAT applies with offset available for CGT payable. Stamp duty with 50% reductions for blood relatives. This will be a voluntary disposition / sale.
 
Depends on the kind of joint ownership. Tenancy in common means each share goes to that person's beneficiaries, not to other joint owners
 
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