Solicitor and WRA disagree over land tax

mrnibbler

Short version: solicitor has a different opinion on land tax then WRA and is asking for 5k when WRA told us the consideration is nil, therefor no tax.

It’s because the solicitor views it as us paying back a load to mother-in-law as she helped us buy the property and thus this “release of dept” is a consideration where as WRA see it as us gifting the house to mother in law and thus the consideration is nil. 

WRA understood the situation fully, we have spoken to them 4 times now and we get the same after every time.

Context: We have a complex situation where we are switching names on two houses. We contacted WRA and spoke to a few different people and all had the same opinion, transfer was a gift and wouldn’t be taxed.

Found a solicitor who gave us the same assessment, she said no tax would be payable.

The solicitor with 8 years experience left and a newly qualified solicitor took the case.

She filed the forms and gave us a 5k tax bill. We were shocked considering the WRA told us it would be considered a gift and no tax would be due.

We had it in writiting from the original solicitor and WRA but the WRA but the new solicitor disregarded it as a lot of the detail was given verbally and we didn’t have everything in writing.

We asked WRA again, to try to get the detail needed.

Same answer, they considered it a a gift and not taxable. 

Solicitor still disagrees and is demanding the tax money.

The reason she disagrees is that my mother-in-law lent us the money to buy the house. So she considers that to be a dept on the property and us giving her the house is a repayment of dept. And that repayment in her eyes is consideration.

In actual reality its more complex as we also gave her the money back but the solicitor have counted that as us buying the other house which is not accurate as that money was used for her to buy the house not use to buy it from her.

If that is genuinely the case then my mother-in-law will just have to pay it but I feel really bad that we told her it wasnt going to cost and shes now having to pay £5k that she wasn’t expecting, because she helped us out of a bad situation. And its hard to swallow when we have been told muktiple times by the WRA that they don’t consider it taxable.

the tranfer forms have now been filled and I fear it might be the the solicitor has interpreted the situation ( which is not accurate to the real situation) in a different way to the WRA and structured the sale it a way that means it will be considered a dept rather then structuring as a gift as I think the original solicitor had planned to do.

Thanks for any advice or insight.

lincroft1710

If you had used the term "Welsh Revenue Authority" in the thread title rather than "WRA", you may have got some replies

loubel

You need to be clearer on what has/is happening.

You borrowed money from MIL and bought house 1. You then paid this back completely and she bought house 2. You are now swapping houses?

Your solicitor doesn't realise/believe that you paid back the loan?

Zerforax

Ask the solicitor to speak to their supervising partner.

sheramber

It is difficult to follow the course of events. Dates might help. 

MIL lent you money to buy your house A.
When did you repay to MIL?

When did she buy house B?

When did you swop names  on houses?

GDB2222

What can I do to help?  

sevenhills

mrnibbler said:

The reason she disagrees is that my mother-in-law lent us the money to buy the house. So she considers that to be a dept on the property and us giving her the house is a repayment of dept. And that repayment in her eyes is consideration.

In actual reality its more complex as we also gave her the money back but the solicitor have counted that as us buying the other house which is not accurate as that money was used for her to buy the house not use to buy it from her.

If it's complex, can you prove the solicitor is wrong?
I would side with the solicitor, unless you can prove otherwise.