Sir Lawrence Barratt has left the Farndale estate in Yorkshire to his two sons, Peter and David Barratt. It is believed that he bought this estate for 1.5m in 1981 and that his net estate which also includes properties in Northumberland and France, is now worth in excess of 40m. As this housing estate passes to his sons rather than his surviving widow, it has triggered an Inheritance Tax liability, a bill which the two brothers now need to raise funds to pay.
In order to pay off this tax bill, they have decided to sell some of the properties in the Farndale estate. It was originally thought that 13 of the 43 properties in the estate were going to be sold, however they have now considered other options available to them and have decided that only 4 of these need to be sold. Understandably, the tenants of these properties are upset by this news as they may still need to find elsewhere to live depending on the new buyers.
If this estate had passed to Barratt’s surviving widow, it would not have been subject to this tax as any part of a deceased person’s estate which passes to a surviving spouse is exempt.
Although Sir Lawrence Barratt’s estate is large in terms of value and the sale of properties in Farndale may be the most appropriate course of action in the circumstances (the extent of which remain unknown), it does serve as a timely reminder to seek professional advice when it comes to planning for the future in order to minimise any knock-on effect that you possibly hadn’t thought of before.
In addition to this, if Barratt’s surviving widow has not received anything at all from her late husband’s estate, it’s worth noting that she may be able to claim some inheritance despite being excluded.
If you would like some advice on estate planning or have a query about claiming inheritance, please contact 0800 916 9056, or email firstname.lastname@example.org.