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Readers' forum : Estate distribution

07 February 2017
Issue: 4586 / Categories: Forum & Feedback

How to distribute an estate in the most tax-efficient manner.

My father died intestate leaving an estate of about £1m – a mixed-use property with two flats above (worth about £350 000 each) and a £300 000 business on the ground floor. All three properties in the mixed-use premises are self-contained. Other jointly owned assets including the family home (£550 000) and another rental property in London (£450 000) passed automatically to my mother.

Under the intestacy rules I my brother and my sister are entitled to about £375 000 (37.5% of £1m) and our mother is entitled to £625 000 (62.5%). We plan to claim full spouse exemption by a deed of variation so our mother receives the £375 000 and then gifts the same assets to us. There would be no inheritance tax. Our mother has a full £1m nil-rate band (by April 2020) and if she survives seven years there would be...

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