REnt and termination of administration period

REnt and termination of administration period

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All assets of an estate have been distributed, except formalisation of of the transfer of the deceased's home has not yet taken place.  The property has been rented, should the rent (prior to transfer of title) be treated as income of the beneficiaries or as Estate income?  At what point does the administration period end?

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By Owain_Glyndwr
04th Sep 2011 09:40

Residue

Until the assets are distributed it's estate income and goes into the residue for disposal just like bank interest received etc.

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By David_Lewis
05th Sep 2011 07:23

Solicitors advice

Thanks I probably should have mentioned this: 

The beneficiaries were the executors.   The tenancy agreement (which commenced after probate was granted) was taken out with the beneficiaries as landlords following solicitors' advice.  The beneficiaries also personally incurred expenses before the tenancy started to get the property into a lettable condition.   The solicitors regarded the transfer of title as a formality.  

Under the circumstances, could the letting be treated as as personal income.

(However if it was treated as estate income and will gives a beneficial interest in the property to the beneficiaries then surely the income would not form part of the residue.

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By Owain_Glyndwr
05th Sep 2011 09:33

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To cover your last point first - it doesnt matter who inherits the property, any income derived from any part of the estate belongs to the estate until such time as the transfer of title takes place. Transfer of title of anything left in a Will is not a matter registering it at the land registry etc, but a matter of when the executor(s) actually hand it over.   

 

In the specific scenario you describe however, the transfer of title seems to have been assumed to have taken place and control of the properties handed to the beneficiaries. They have named themselves as the landlors and have spent some of their own money on the property. So, this should be treated just like any other buy to let property with the one difference being that the purchase proce was zero (ie inherited).

 

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By David_Lewis
06th Sep 2011 07:27

Thanks for your help that's really helpful.

Regarding your last comment shouldn't the purchase price be the probate value?

 

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