Inheritance and divorce

[Helennn]

Rather a specific question so don't know if anyone can help? My husband is about to inherit some land from his late father along with his 2 brothers. I would like to change my dh's share into my name as well, before it is sold, so that we can make the most of my capital gains tax allowance. But, in the event of a divorce, (I'm sure my MIL will have thought of this), would I have more claim on it than if it was left just in my dh's name? Here's hoping someone is around who knows about this sort of thing!!!! (We have 2 children).

Is a divorce likely in the near future then? If not then I wouldn't worry about it.

Has your fil recently died? Is the land to be sold shortly? If yes and yes then there should not be (subject to gaining planning permission on the land in the interim) much difference in the iht value of the land and the cgt base value and so it would not be necessary to transfer it into your name - again assuming no divorce imminent - further details needed for further advice

Sorry to disappear - back now! No, fortunately divorce not likely, but due to it happening several times in family recently think MIL will be aware of this. As the will is subject to a deed of variation solicitor is currently deciding if land should be passed to boys first and then sold, (this would involve about 7 lots of conveyancing fees so could prove costly), or if it is left as being owned by MIL who would then give boys equivalent amount of money. Planning permission is being sought on part of estate so CGT would come into play.
Just wanted to reassure MIL, (who I actually get on very well with), that changing it from just dh's to mine as well would not make any difference in event of divorce. Also, solicitor is taking his time to decide the best way to do it and part of the land is due to be sold quite soon - so don't want to run out of time if we do decide to change the ownership to mine and dh's name.

I know this may sound odd/complicated but it has happened twice lately where farms have had to change legal ownership to avoid the soon to be ex-wife having a claim of half the husband's family farm and it having to be sold.

Many thanks if you are able to help!!!

Can't help on the divorce issue/questions. Any further iht/cgt advice - do ask. If deed of variation (as I am sure you will know) is completed, it is as if the will had said that say the land should go to the sons - hence the base cost for cgt purposes would be the iht value. Is it necessary to use your cgt allowance ? If you are a sahm (with no other income) might it make sense for you to hold the land as tenants in common with your dh (as written into the deed of variation) with unequal shares to make the most of your tax exemptions/tax rate. This may well give your poor mil apoplexy !!

Thanks indignatio - I am a partner in my dh's business and share profits equally - so it would make it worthwhile. Not actually sure if the deed of variation is completed, don't think it can be else he wouldn't be able to change it. Unfortunately he is old school solicitor, ie takes his time, thinks he's God and doesn't tell you much!! Think I need to ask some questions. Many thanks.

Helennn, the divorce question isn't actually that straightforward, because a divorce settlement will be more related to the circumstances at the time of the divorce (eg the need to ensure that children are provided for etc).

But in terms of transferring it into your name to use your CGT allowance, this doesn't need to happen until immediately before the onward sale (so dh would be selling half to you to sell to 3P). The transfer from dh to you is at nil gain/loss to him, so you would sell at that point and be able to use your allowance (as well as any other cg losses).

In the recesses of my brain - I haven't worked in this field for the last 4 years (sahm) there may be an upper limit that your dh can transfer to you as spouse - for some reason alarm bells are ringing on this one. Otherwise I would agree with Ladymuck on the need to transfer just before sale - although I had understood from your post that this may be imminent

Why not just have the children not you or your exh inheriting the land or what about the children and you and he so you use all those CGT allowances if you think there is going to be any capital gain at all? Property inherited in marriage and then used as part of your normal marital assets for many years I don't think is separated out on divorce so it doesn't matter if in your name as his, whereas if it's kept separately and not needed to house children and perhaps if recently inherited then it could be your husband would be worse off.

Thanks all - sorry for disappearing again! Some land will be sold within next couple of months but there is also a stone barn which we are applying for planning permission on, so this would not be sold for some time - and could create a large capital gain. Don't think there should be alarm bells ringing - Dh and I are quite happy at moment, but I am very realistic/practical and like to know facts before doing anything! It is reassuring to know that if the land, (not money), is left to dh it can be changed to me as well at last moment and we won't miss out on this due to lack of time because of solicitor taking his time. This was one of my main concerns - didn't want to be out of pocket to tune of several thousand pounds because sol. so slow. Think maybe we need to get our own solicitor for advice rather than one dealing probate! Thanks for all your help.

You misunderstand me - the alarm bells are regarding the amount of tax free gifting between husband and wife - just something to check with your solicitor