Beneficial owner/ Legal Owner

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  • #57737
    hugheca
    Participant

    Hi

    I know a similar thread has been covered before but would appreciate your thoughts about the senario

    Mother and son jointly owned a property and lived there. The mother died in 2015, there was no will but it had been agreed by the motherbefore she died that her share would pass to the sister. The sister then moved into the property with her brother  and put her property that she had moved from up for sale.

     

     

    In a March 2016 the son said his sister had bought his share of the property. The sister confirmed that she had as she had sold her other property. She was now sole owner and put a claim in for Council Tax .

    Land Registry was never changed and still shows today that the Mother and son are the  owners.

    The sister was asked about the ownership and why her name was not on the Land Registry. She advised that there was a lot going on around the time her mother died as well as all the upset. They just havent got round to changing it and they are put off by the amount it is going to cost. When asked about the legally transferring the property to the sister and solicitors involved she said there were no solicitors. It was a verbal agreement between her and her brother and she transferred the money to him. She said she can provide details of the amount transferred and get a letter from her brother and her children to support what she is saying.

     

    Both her brother and sister live in the property. Who would you say is the benefical owner?

     

    What do you think?

     

     

     

    #163594
    clarence_phillips
    Participant

    Hi

    If the Mother died without making a will under the rules of intestasy her share would pass equally to the brother and sister. At that point therefore he would own 3/4 and she 1/4.   

    If she then pays him to buy out his share she would become the beneficial owner of the whole iwhile he would still be regarded as the legal owner but holding ownership in trust for him. Unless there is a deed of trust she will have to show she paid the market price for his 3/4 share in order to claim beneficail ownership. If she paid less the difference would be regarded as a gift from him to her. 

    This is getting into the relms of inheritence tax now which I dont think has anything to do with your question? And I am starting to flounder. 🙂    

    #163597
    hugheca
    Participant

    There was no legal evidence that the ownership changed. She was a bit cagey about it when I asked. Just said it was a verbal agreement and she gave him the money. I know she could be the benefical owner even if not the legal owner. I am waiting for proof of money being transferred to see how much. He still lives in the property with her. Its all a bit strange and when questioned starts getting flustered.

    #163600
    clarence_phillips
    Participant

    I would imagine that for council tax purposes legal ownership will take presedence until or unless beneficial ownership is conclusively proved? I might be wrong . Good luck with your enquiries. .

    #163605
    hugheca
    Participant

    I have checked a bit further andound that the brother was not a tenant in common but a joint tenant with his mother. So from what I am readng implies that on his mothers death the property would pass to him.  It would only be able to pass partly to the sister if they had been tenants in common and then if there was no will then she would become a  beneficial owner.

     

    Do you agree?

    #163607
    pamrichardson
    Participant

    if the property is 'jointly' owned, then on the mothers death, the property vests in the other joint owner, regardless of a will. The only way it wouldnt is if there was evidence she had severed the joint tenancy and created a tenancy in common.

    If it was already a tenancy in common it would show as such in the land registry and then yes they both owned 50% of the property each and her 50% would vest in her estate.

    I have had a similar case recently, and the fact that they 'say this is the case' was not accepted by the appeal panel (albeit it was an appeal in respect of care charges there was a similar impact for benefits).

    He could swear a statutory declaration to the effect of what he says has happened, and provide evidence of the transfer of funds to support it. However, that doesnt answer the question of whether he actually legally owned 50% or 100% or some other %.

    The other question is what is the impact on him of having 'sold' her the property? Does he now have capital?

    #163612
    hugheca
    Participant

    I agree about the tennants in common. Have checked it was a joint tenancy not tenants in common. There is evidence that money went into his bank account but it was about 10 months after the mothers death. It was around half the value of the property.

    #163613
    pamrichardson
    Participant

    I would suggest that they need to see a good solicitor to unravel all of this!.

    From your perspective, however, if she is making a claim to CTS (which I assume she is) you then have to decide whether what they now do to try to change the legal position has been done to take advantage of any benefit scheme.

    In the meantime, the legal position is relatively clear in that, regardless of whatever money has passed between the (as there is no real evidence of why that money was passed over apart from they say so) then the clear legal position is unaltered and he is the 100% legal and beneficial owner of the property. If they deem it to be anything else then they need to seek a legal remedy to change that. As the 100% owner of the property (and he cannot argue that legally he isnt) he is quite within his rights to gift any or all to his sister (unless of course that impacts on any benefit entitlements he has). However, he has to do so legally for it to impact on your decision.

    I am back to the original point, it cannot be something just because 'they say it is' and it suits them to do so…(if that makes sense!). The council is entitled to place more weight on the land registry information than on anything else and the land registry shows him to be the owner.

    In which case I would class him as the owner and leave them to challenge or take the legal route they should have in the first place.

    #163614
    hugheca
    Participant

    Thank you for your advice.

    He claim is up and running for Ctax and she then applied for a backdate which is where I spotted all this. I am not sure if they change the legal position now that it could be taking advantage as she is currently getting it. But my  view  at the moment is to cancel her claim but I cant reinstate the brothers from when they say she took owner ship as his capital exceeds.

    #163616
    pamrichardson
    Participant

    But based on what you are saying, if he is the owner then he is the person liable for CTAX and not her.Therefore you have no option but to cancel her claim. And yes if his capital exceeds then that will also have an impact. Not sure if you have a 2AR in your scheme which she might benefit from???

    No matter what they now do legally, it could be viewed to take advantage of the scheme. In any event, she has only paid him half the value of the property so he still owns half and for him to now 'gift' her the other half is clear deprivation as you will be clearly explaining to them the correct legal position so there will be no doubt for them. All could have been avoided if they had bothered to take the correct legal advice/steps at the correct time. The fact they havent is their problem, however, and this is the result!

    #163617
    hugheca
    Participant

    No we dont have 2nd adult rebate any more.

     

    Thank you for your advice. I appreciate it. It has helped clarify what I thought.

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