CGT / Shared Ownership / inheritance

[CoastalCalm]

Sorry if this is long - I’ll try and make it as concise as possible

Parents had mirror wills , leaving 50% share of property to children on death with lifetime interest for surviving partner.

Wills had been drafted , couple of years passed and noticed one child’s name was misspelled , original solicitor had retired so local solicitor instructed to write same will with same intentions with error corrected. Parents filed wills away without any real scrutiny trusting solicitor had done as asked.

Fast forward a few years , Dad died after long illness where mum had cared for him.

After funeral etc started probate and retrieved will - dads will left everything to my mum , nothing specified re inheritance of house by children.

Mum very upset , instructed new solicitor and the solictor who drafted wills told to resolve issue - unsure if variation was done (currently trying to find out) but the new solicitor dealt with him and sorted with land registry so mum and children now joint owners (currently trying to find out if this was done via TR1 and basis of split) New solicitor letter said 50% mum , 50% mum and kids - this wasn’t the intention from dads original will either !

If done via transfer then now kids would be liable for CGT but not IHT as estate below threshold. If it had been a simple inheritance per original will no CGT implication - is that correct ?

It could now be that mum owns her 50% plus 1/3 of the 50% that the 2 kids should have inherited so not only do kids have CGT liability they own less than intended.

More than two years have passed since dads death and this has come to light as we are finally getting round to changing mums will which had been changed without her request to leave everything to my now deceased dad.

Is there any thing we can do to restore the situation to what was originally intended ? Mum has accepted her half of house could go to care home fees and no point transferring ownership as the 7 year thing is just for IHT but potentially she could lose her 50% plus the third of dads 50% she owns in error and they could view the correction as a deprivation of assets and children lose what should have been their inheritance:

Before anyone comes into thread and says serves us right for trying to avoid care home fees , my mum gave up 15 years of her life to be a full time carer for my dad as she was determined not to place him in a home she had no help at all - he mentally abused her in the later years due to dementia and now she is heartbroken that if she needs full time care their home could be surrendered in full. As one of the kids frankly I don’t need the inheritance and it has been ring fenced in my will to pass to my niece and nephew so it’s not about me being grabby either.

Any advice on how it might be possible to unravel would be appreciated , my mum is in bits with it

That’s a stressful situation as there are so many aspects to it. Are you thinking of taking action against the second solicetor? How old is your Mum? Are you sure the money, stress and time that it might take to sort this out will be worth it. Many people are overly worried about care home fees but most people don’t need to go into a care home and forget the risks and costs involved in giving away half of their homes.

was your Dad already ill when they made the original will?

Hopefully you will get some pointers from legal people on the thread.

Assuming there's no IHT exposure you won't get clobbered for CGT necessarily as its your mums primary residence presumably.

Your main issue is carehome fees and how much of the house will be up for grabs. Unfortunately you're obviously out of time to read anything back into your dad's will (which you know. I think your assessment over all is correct). So a local authority will probably include everything your mum owns of the house in its assessment but will use up cash assets first. If your mum tries to give any of the house that she owns away now (if care is a possibility) then yes it's deliberate deprivation.

The only course of action you have is for professional negligence against the solicitors who prepared the original and subsequent Wills but I'm interested in how the mistakes were made twice particularly in the Will trying to rectify the original mistake. I suspect unless the solicitors are really shit, that the instructions given by your parent(s) may have been the problem but thats just a presumption on my part. Unfortunately their terms and conditions will probably provide that a client bears responsibility for the accuracy of their instructions and also checks any document properly before signing. So they may defend on that basis.

If your children own a quarter and your mum the rest then they will pay CGT on their share. what is more likely however is that your mum owns half (as she always did) and the other half has been left to the children with your mum having a life interest. This seems to be what your father intended. In such a trust CGT is payable when the half the children own vests in them.

The irony is that if the property had vested wholly in your mum and she had no care home fees then no CGT would be charged and if your dad hadn't used any of his inheritance tax nil rate band he could have passed this to your mum meaning the first £1m would be free of IHT.

Cgt is not payable by residuary beneficiaries once a life interest ends.

The trust property is in the life tenants IHT estate. But the OP says IHT is not an issue.

CGT is not payable on transfer of a primary residence to children via a Will or gift.(with certain very specific exceptions).

OP I'd get legal advice rather than relying on mumsnet!