Property Transfer and Probate


J

Jon

My father died on the 8th April 2010.
He left a Will leaving his house absolutely to myself.
I know I have to apply for Probate before I can have the
title transferred over to myself at the Land Registry.
What I want to know is - at what date does the property
ownership revert to myself for tax purposes? The date
of death or the date probate is granted?
The reason I wish to know is because the property is being
rented out and it makes a difference as to which tax return
the property rental income goes on, my father's or my own.

Jon
 
M

Mike Lewis

Jon said:
My father died on the 8th April 2010. He left a Will leaving his house
absolutely to myself.
I know I have to apply for Probate before I can have the
title transferred over to myself at the Land Registry.
What I want to know is - at what date does the property
ownership revert to myself for tax purposes? The date of death or the
date probate is granted?
The reason I wish to know is because the property is being
rented out and it makes a difference as to which tax return the property
rental income goes on, my father's or my own.
I don't know definitively but I think date of death. However the estate will
receive the rent on your behalf until the property is transferred into your
name.
 
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M

Martin

Mike Lewis said:
I don't know definitively but I think date of death. However the estate
will receive the rent on your behalf until the property is transferred
into your name.
I don't know definitively either, but AIUI bank interest earned during the
"administration period" (i.e. between date of death and grant of probate) is
taxed on the Executor (who I deduce may be the OP in this particular case).
I imagine rental income would be treated in the same way.
 
T

Tim

... AIUI bank interest earned during the "administration period" (i.e.
between date of death
and grant of probate) is taxed on the Executor...
Even if they are not a beneficiary?
 
R

Ronald Raygun

Tim said:
Even if they are not a beneficiary?
I don't see why not. It involves less administrative hassle than HMRC
having to wait until they're told which of the beneficiaries are to
receive what proportions of the interest. If only the executor
is taxed it keeps things simple. Naturally the executor wouldn't be
expected to be personally out of pocket and would simply reimburse
himself out of the estate.

This can be inequitable. For instance, the beneficiaries could all be
basic rate taxpayers or even non-taxpayers, but the executor might be
higher rate. Thus the beneficiaries would in effect be inappropriately
taxed at the higher rate.

But it could also be the other way round. Might be an incentive to
delay applying for probate as long as possible...
 
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M

Martin

Ronald Raygun said:
I don't see why not. It involves less administrative hassle than HMRC
having to wait until they're told which of the beneficiaries are to
receive what proportions of the interest. If only the executor
is taxed it keeps things simple. Naturally the executor wouldn't be
expected to be personally out of pocket and would simply reimburse
himself out of the estate.

This can be inequitable. For instance, the beneficiaries could all be
basic rate taxpayers or even non-taxpayers, but the executor might be
higher rate. Thus the beneficiaries would in effect be inappropriately
taxed at the higher rate.

But it could also be the other way round. Might be an incentive to
delay applying for probate as long as possible...
The eventual beneficiary reports the income, on which he is ultimately
taxable, but also claims his share of the attached tax credit - being the
tax paid by Executor to HMRC.

The tax paid by executor (administrator) is at BR, with no allowances. The
"income" and tax does not disturb the executor's own tax position,
thresholds etc.

HTH
 

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