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Inheritance Tax Worries

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  • 31-12-2012 2:15pm
    #1
    ashleyhere
    Closed Accounts Posts: 28 ✭


    Writing this on behalf of a family member. She inherited a house 6 years ago and due to a soliciter cockup found out she could'nt sell it because it was never regististered in the previous owners name until recently.

    She is close to a nervous breakdown over the house as it is in bad condition and the only option would be to knock it and start again. She has approached the Revenue but they want their money and penalties on top of what she owes.

    She can't afford the inheritance tax as she can't sell it to pay it. Any advice or ideas gratefully accepted. Thanks for reading.


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    #2
    tinkerbell
    Registered Users Posts: 6,423 ✭✭✭tinkerbell


    I'd say she'd need to seek legal advice, tbh.


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    #3
    ashleyhere
    Closed Accounts Posts: 28 ✭ashleyhere


    I am of the same opinion but it is very difficult to speak to her at the moment as she is so stressed out.


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    #4
    Chris_5339762
    Registered Users Posts: 5,902 ✭✭✭Chris_5339762


    Ask a solicitor, then get him to ring up the old solicitor (who did the cockup) and tear strips off them.


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    #5
    tony81
    Closed Accounts Posts: 595 ✭✭✭tony81


    ashleyhere wrote: »
    Writing this on behalf of a family member. She inherited a house 6 years ago and due to a soliciter cockup found out she could'nt sell it because it was never regististered in the previous owners name until recently.

    Surely if the house cannot be sold it does not have a market and therefore no market value?

    Or perhaps, the market value of a home with such legal issues is a lot less than the market value being calculated by the revenue commissioners.

    For example, few people would buy a house valued at €200,000 if there was a boundary dispute with a neighbour. In that case, the market value may be €80,000, with a potential value of €200,000 if the dispute went in the purchaser's favour or a value of €40,000 if it went against it.

    I'm not a lawyer, however this may be an angle her solicitor could explore, and try to make a settlement with the revenue commissioners using this argument.


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    #6
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    The title issue needs to be resolved before anything. She needs to instruct a solicitor to do this, probate and liaise with Revenue.


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    #7
    Luca Brasi
    Registered Users Posts: 300 ✭✭Luca Brasi


    ashleyhere wrote: »
    Writing this on behalf of a family member. She inherited a house 6 years ago and due to a soliciter cockup found out she could'nt sell it because it was never regististered in the previous owners name until recently.

    She is close to a nervous breakdown over the house as it is in bad condition and the only option would be to knock it and start again. She has approached the Revenue but they want their money and penalties on top of what she owes.

    She can't afford the inheritance tax as she can't sell it to pay it. Any advice or ideas gratefully accepted. Thanks for reading.

    If the house wasnt registered in the previous owners name until recently then legally she could not be the owner until that registration was complete and then conveyed to her. Surely she cannot be responsible for inheritance tax until the property is in her name. This matter will probably need a Barristers advice.


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    #8
    doubleglaze
    Registered Users Posts: 405 ✭✭doubleglaze


    Sounds like a headache.

    It's not unusual for some of these inheritances to be a poisoned chalice of sorts!

    If the site on which the house is situated is worth about the same amount as the inheritance tax (or a bit more), I wonder if she could just gift it to the state and be rid of it?


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    #9
    Marcusm
    Registered Users Posts: 10,322 ✭✭✭✭Marcusm


    advice is needed independent of the probate solicitor as it may be in the beneficiary's best interest to refuse the inheritance. THe valuation date can be as early as the date of death and with the massive drop off in values since then, it may not be economical to receive the inheritance. Given the title difficulties, it is unlikely to be the date of death in this case but strong tax advice is needed independent of the probate solicitor.


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    #10
    ashleyhere
    Closed Accounts Posts: 28 ✭ashleyhere


    Thanks for all the replies guys. You have no idea how much you have helped with all your suggestions. Taking her into my solicter next week and go through all the options with them.
    Happy New Year to everyone and thanks again.


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    #11
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    6 years seems excessive.
    She is not liable for anything until she becomes 'beneficially entitled to it on possession'. So I echo the above and would get legal opinion.
    I would also suggest she engage with Revenue asap. They can be fairly reasonable in most cases.

    If she is assessed from 6 years ago when prices were much higher than now it could be a considerable sum.

    The tax due will depend on who she inherited it from i.e. parent, other relative, unconnected person


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