Tax benefits of saying in Will that house must be sold in event of your death
- Thread starter Prosper
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I can say that I have seen the consequences of a family home left to 3 siblings without any mention of the asset being sold. 2 wanted to sell and third did not. None were living in the house but it caused alot of attrition. best to talk now to the future beneficiary and ask their opinion that way there is no surprises
T McGibney
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Not exactly sure what question you're actually asking, but our solicitor warned us when making our wills that attempting to dictate events from beyond the grave can create untold difficulties and hardship for survivors depending on circumstances and events in the meantime.
Brendan Burgess
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I remember some years ago when my Aunt was making a will, the solicitor strongly advised inserting the words "the property to be sold" in the will.
From memory, there seemed to be some tax advantage, although I can't think what it might have been.
From reading askaboutmoney, it's clear that the will should include this statement to stop one of the children occupying the house and refusing to sell.
Brendan
From memory, there seemed to be some tax advantage, although I can't think what it might have been.
From reading askaboutmoney, it's clear that the will should include this statement to stop one of the children occupying the house and refusing to sell.
Brendan
Far better stipulate that the house must be sold than have one of the 3 beneficiaries refuse to agree to sale against the opposite wish of his brothers.
I'm joint executor of our deceased father's estate. Earlier this week I was in the Tax office off O'Connell St. to establish what our CGT liabilty was and the Revenue person asked if my fathers Will stated if the house had to be sold. It didn't, so I didn't bother asking the Revenue person to explain the tax advantage. However, Palerider has confirmed that it means no CGT would be payable. If that's so then that's another reason to stipulate in your Will that the house should be sold.
T McGibney
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That's all well and good until something bad and unexpected happens. It would be terrible to have to sell a house in the depths of a price collapse for instance. And arguably worse to have to make a family member homeless in the event of a mandated sale. We never know who amongst our families could be sick, vulnerable or in other dire circumstances after our deaths.
Sounds too good to be true. Are you sure that this wouldn't just be a matter of paying CAT instead of CGT?
Could be, I'm not sure as I knew, that whatever the Revenue person thought was the advantage, didn't apply to us as our father did not stipulate in his Will that the house was to be sold after his death. However, Palerider stated that there would be no CGT in this scenario.
Brendan Burgess
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Hi Tommy
The overwhelming advantages arise from specifying that the house has to be sold. It removes the source of argument which arises in many cases.
Sure the market may be soft. But the executor or beneficiaries can agree to defer selling it. In the absence of this clause, one beneficiary could refuse to sell the house or delay it long enough for prices to fall.
If the estate is to be split three ways, then the testator's wishes should be respected. If the testator wants to protect against homelessness, they can specify that in their will.
The only downside I see in specifying that the house must be sold is the case where the beneficiaries have big capital losses forward and there is a big gain in value of the property between the date of death and the date of sale. If the property is conveyed to the beneficiaries and later sold by them, I gather that they can use set the losses forward. But that is too tenuous.
The clarity of specifying that it should be sold outweighs everything else.
Brendan
My Story, 17 years of dealing with this. Short story, three siblings left house, one refuses to sell. House empty, unpaid bill, house gone way down in value. Short of seeking an order of Partition, I am screwed. House is not worth much. Sibling was sent lots of legal letters to settle, all ignored basically. So my advice, put it in your will that the house has to be sold.
Why did one refuse to sell given that the house was empty? I hope you haven't suffered much by way of legal costs.
There are too many private issues I don't feel comfortable posting, but bottom line is yes I have lost a lot financially, so has my other sibling who wanted to sell. The hold out has a n emotional tie to the house, but lives overseas, as do I. My advice to you from my own personal experience is not to leave a house to more than one person. One would never think that an issue like a house would split a family apart. I would recommend putting in the will that the house has to be sold and proceeds divided between the siblings. I don't think many people realize this too can happen to you. This house is no longer an asset to me, it is a liability., and I see no way out.
It's your house and only you can and should decide how you want your estate treated. Forget about tax treatment. Tax laws can change between the date of your will and the date of probate. Forget about the property market; it's unlikely your personal representative would be able to gauge when is the best time to sell a property. It would be prudent to state how the proceeds of your estate are to be divided between the beneficiaries. Your will should as far as possible remove doubt and provide clear instructions to your personal representatives on how your estate is to be administered in accordance with your wishes.
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Thanks for that PMU - I agree fully. BTW would you have a look at a thread I started called Liable for CAT means not liable for CGT where the gain is due................. especially at my last post in it - I'd like you're views on it please. I recall being confused recently when reading past threads on CGT and one you wrote was very clear and as a result I did not seek a new PPS for the Estate but used my father's PPS and completed Payslip A and sent it with cheque for CGT to Limerick and then sent completed CG1 Form to my Dad's Revenue PAYE Office. Revenue have processed the cheque and money has been deducted from the Executor Account.
Curlywurly
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My relative directed in the will that the house be sold and the proceeds divided between a number of beneficiaries in the B Group Threshold for CAT. When house sold estate WAS liable for CGT on the difference between value at date of death and sale price. All beneficiaries were also liable for CAT on their inheritance. Therefore it is incorrect to say by putting that clause in the will no CGT is payable.