Inheritance

Campbell20

I’m looking for some advice regarding inheritance, capital gains tax and benefits. I’m supposed to be receiving some inheritance money from my mum after a piece of land owned by the family has been sold for development. The amount will be around £50,000. I’m currently not working due to being in remission from cancer and I’m claiming Universal Credit. It’s likely that I’m never going to be working again. My mum has told me that the money was given to the family on 28/09/23 and that you have 60 days from then to pay capital gains tax. Please can someone confirm this. I’ve also been advised that if I pay the money into my bank account I will have to come out of the benefit system and live off this inheritance money. I would like advice on how I can receive this money I.e. into a trust without losing my benefits as I’d like to keep it and leave it to my four children as a nest egg. Thank you 

stuhse

Inhertitance is something you get from dead people.  Is this money from your mums will or someone elses will that your mum is administering ?

mebu60

If this is coming to you from a will you can ask for a Deed of Variation to direct it to your children. To have now or held in trust until a specified point.
Not clear why CGT is an issue for you. That is for whoever or whichever entity owned and sold the land.

Shirker_Bee

Possible deprivation of assets. 

Campbell20

Thank you. It’s money from family land that was sold to develop. My mums told me that it was to be distributed to 11 family members, my mum, 2 aunties and 8 grandchildren. It’s not coming from a will as my mum is still alive. The solicitors who dealt with the money from the land have told me the money has already been given to the family so they can’t help me and I’ve spoken to a couple of local solicitors, they say it’s not their expertise and I should go back to the solicitors who dealt with the matter. According to my mum my sister and cousins have already received their money and have paid capital gains tax. 

stuhse

It sounds like your mum is simply gifting you some money.  If you dont want it, one option might be to get her to give direct to your children instead.

TELLIT01

If you receive the money you will lose any entitlement to UC.  Unless there was some form of legally binding contract which forces the money to come to you it may be possible to have it put in trust for the children.  That may not be straightforward as it's possible transferring the money may still be seen as deprivation of capital.

born_again

Campbell20 said:

I’m looking for some advice regarding inheritance, capital gains tax and benefits. I’m supposed to be receiving some inheritance money from my mum after a piece of land owned by the family has been sold for development. The amount will be around £50,000. I’m currently not working due to being in remission from cancer and I’m claiming Universal Credit. It’s likely that I’m never going to be working again. My mum has told me that the money was given to the family on 28/09/23 and that you have 60 days from then to pay capital gains tax. Please can someone confirm this. I’ve also been advised that if I pay the money into my bank account I will have to come out of the benefit system and live off this inheritance money. I would like advice on how I can receive this money I.e. into a trust without losing my benefits as I’d like to keep it and leave it to my four children as a nest egg. Thank you 

Not in relation to benefits, as others have answered that.

Is that when the solicitor sent the money?
If so how was it sent?
Did you provide account details to them?

As that should have arrived by now. So your mum needs to be chasing solicitor up to trace the funds with their bank.

Keep_pedalling

CGT falls on the owners of the land that was sold.

Campbell20

Thank you. Yes I believe the money was transferred to my mums and 2 aunties bank accounts on 28/09/23 and my mum has told me it was up to them to give it to their children (8 grandchildren). My mum told me the money was split 11 ways, her and my 2 aunties and 8 grandchildren. I didn’t provide any bank details, my mum wants to give me a cheque but I want to get full information before I take a cheque. The other issue I have is that if I’ve got to use the money to live on is it considered an income and in relation to that am I liable to pay child maintainence for my 15 year old daughter. 

Yamor

It sounds like a pretty standard piece of tax planning has happened here.

There was likely a discretionary trust holding the asset. Then, the asset would have been appointed out to various beneficiaries, with holdover relief claimed to ensure no CGT at that point. Then when the asset was sold, the CGT is payable by each beneficiary on their share of the gain.

Assuming this is what has happened:

You would have been given beneficial ownership of a share of the asset some time before the sale. This could have affected your benefits at that point. However, your share of the asset may have had negligible value, due to the difficulty you would have in marketing such a share of the asset.

Once the asset was sold, the money was yours immedistely, despite being in your mother's account. So you definitely would have lost your benefit entitlement at that point.

By the way, the 60-day rule shouldn't apply for the CGT reporting and paying, as that only applies to residential property.