thank you for concurring on this..
So now we have two formulae (one above and one given by 'someone" for dividing the value of 50% share in the estate -- although division of "worthless" share seems insignificant but the two methods give a different outcome (eventually):
1- divide over NET value
children: 325/400 = 81%
mother/widow: 75/400 = 19%
and dividing 70k debt in 81:19 ratio between them
So (ignoring rise in property value) eventually when they have paid the debt off the division would be equivalent of 382k : 88k
In this model, the ratios change with change in value of debt - and at 145k debt (where estate's net value = NRB) mother gets 0 value and 0 debt to redeem
2- divide over Gross Value
children: 325/470 = 69%
mother: 75/470 = = 31%
and dividing 70k debt in 69:31 ratio between them
So (ignoring rise in property value) eventually when they have paid the debt off the division would be equivalent of 373.4k : 96.6k
In this model, the ratios do not change with change in value of debt - and at 145k debt, mother gets 0 value share but still gets a 31% redeemable debt (and under lying equity to be released on redemption) of about 44k
Is there any technical reference which could confirm which model is indeed the preferred/correct way of deciding the relative share.
As the two out comes have a significant difference.
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch