Is it IHT or Capital gains Tax that I need to pay?

Computer_User

A family member died before a settlement on land taken by a cumpulsory Purchase order had been made.

That claim has now settled but it has been several years since the Date of Death . All details werre declared when the IHT form was submitted .
Which tax needs to be paid?

There was no IHT to pay on the estate at time of death.
I am now wondering is there a cut off point for IHT due?

Is it IHT or Capital Gains that needs to be paid?

The accountant is unsure and says it needs researching. Is there any place I can find information that would be helpful?

Thanks

SeniorSam

If the compulsory purchase had not been completed, then the value within the estate is the figure agreed, as that was it's true value then. If the sale was then delayed. but the purchase price remained the same, then nothing changes. If there was no IHT at het time, then there will be none now.

If the final price had incresed since the date of death, then there may be CGT between date of death and completion of the sale, but that property would have been held by the executors of the estate for the beneficiaries. Each beneficiary would have a CGT allowance to offset against the gain. Only you have the figures to work that out.

Computer_User

Thank you for the prompt reply - I am not sure what you mean by the compulsory purchase had not been completed - the land had been taken but no offer had been made and none was made when the IHT form was put in. The circumstances were explained in detail to the IHT dept and a value that kept us within the nil rate band was submitted. The solicitor said you cant pay tax on a figure you may not achieve so it was explained on the form. The value now achieved exceeds value declared at DOD.

Any help appreciated

Thank you!

G6JNS

Computer_User wrote: »

A family member died before a settlement on land taken by a cumpulsory Purchase order had been made.

That claim has now settled but it has been several years since the Date of Death . All details werre declared when the IHT form was submitted .
Which tax needs to be paid?

There was no IHT to pay on the estate at time of death.
I am now wondering is there a cut off point for IHT due?

Is it IHT or Capital Gains that needs to be paid?

The accountant is unsure and says it needs researching. Is there any place I can find information that would be helpful?

Thanks

If the accountant does not know then I would sack him. He should be able to sort it all out and advise on the tax aspects.

SeniorSam

Some figures would help, but please clarify who sold the land - executors or beneficiaries?

I would also agree with G6JNS, if the Accountant does not know the answer about taxation, he should not be a person to trust.

Savvy_Sue

It is possible the accountant is saying "I'm not sure, I need to research this", but if s/he doesn't come up with a good answer soon then I'd agree, they need sacking ...

Computer_User

I believe the accountant is saying "I'm not sure, I need to research this. I am also doing the research to help the executor. The executor is son of the deceased ( so he is also a beneficiary) and I am a one of several other beneficiaries.
I have used the forum before and know that it is really good at providing a range of answers that help people to think beyond their existing narrow range of knowledge. I want to be better informed for the next meeting and so that I can ask the right questions and help the executor when we go back to the accountant .

The decision was taken at time of the IHT submission to explain that there was no idea of the market value of the land at DOD since it had been taken prior to the death and no offer had at that time been made. For IHT purposes it was declared that the best that could be done was placed a value on the property that would keep the estate within nil rate band.


The figure now mentioned is above that declared for IHT and I assume will be paid to the executor/ and beneficiaries named in the will .
Since the money is coming into the estate after the estate has in effect been completed I am seeking clarification on which tax is due - IHT or CGT ?


In other words is there a cut off point for paying IHT or does IHT remain liable for ever?
Thanks in appreciation of further help.

G6JNS

Computer_User wrote: »

I believe the accountant is saying "I'm not sure, I need to research this. I am also doing the research to help the executor. The executor is son of the deceased ( so he is also a beneficiary) and I am a one of several other beneficiaries.
I have used the forum before and know that it is really good at providing a range of answers that help people to think beyond their existing narrow range of knowledge. I want to be better informed for the next meeting and so that I can ask the right questions and help the executor when we go back to the accountant .

The decision was taken at time of the IHT submission to explain that there was no idea of the market value of the land at DOD since it had been taken prior to the death and no offer had at that time been made. For IHT purposes it was declared that the best that could be done was placed a value on the property that would keep the estate within nil rate band.


The figure now mentioned is above that declared for IHT and I assume will be paid to the executor/ and beneficiaries named in the will .
Since the money is coming into the estate after the estate has in effect been completed I am seeking clarification on which tax is due - IHT or CGT ?


In other words is there a cut off point for paying IHT or does IHT remain liable for ever?
Thanks in appreciation of further help.

If the accountant is not sure then you need to ask an IHT specialist for advice. The fee should save you far more than it costs.

Computer_User

Thanks appreciated. Any idea on what the fee might be?

getmore4less

This is a situation probably so rare that not many come across it and would have to research ask HMRC, even IHT specialists.

as I understand the time line.

Land was disposed of prior to death(grabed by the CP order)
it's value at that time would be an asset at DOD for IHT

problem is at that time the value was unknown so a guess was made.

later the value is known and the money handed over.

There may be a complication is there is interest to compensate for the time lag.

There may even be a CGT implication before the DOD guess that was allready covered

Computer_User

Thanks,

yes there is interest to come at simple rate but interest is 0.5% below the Bank of England rate and for some years that meant zero so not got exact figures yet.

Are you saying we have two taxes to pay? IHT and CGT ?

The land had been in family for years so not sure about CGT implications at DOD

The accountant said it will take research and I was trying to understand the situation fully.

Any ideas of the cost of IHT specialist?


Thanks


Thanks again