Compensation after probate

cantonathecat

Hi 

My mum passed away 5 years ago 

2 years later I received a letter from Cyprus 
About farming land with olive trees had been compulsory purchase in 1971 after archligogical items were found on the land

After futhther research my mum was offered a settlement inn1982 that we never received in the uk 

I contacted the cypriot government and through my solicitors 3 years of negotiations a settlement has finally been agreed even though it was less than 40 percent of market value it whould have taken another 10 years to go to court so regardless I accepted there offer 

So is there inheritance tax to be paid for the compensation of the farm land 

I spoke to my accountant who confirmed there is no capital gains to be paid and referred me to a inheritance tax specialist who was unable to give definite awnser 

So is the corrective to be paid or not ? 

Cantonathecat 




 

Marcon

cantonathecat said:

Hi 

My mum passed away 5 years ago 

2 years later I received a letter from Cyprus 
About farming land with olive trees had been compulsory purchase in 1971 after archligogical items were found on the land

After futhther research my mum was offered a settlement inn1982 that we never received in the uk 

I contacted the cypriot government and through my solicitors 3 years of negotiations a settlement has finally been agreed even though it was less than 40 percent of market value it whould have taken another 10 years to go to court so regardless I accepted there offer 

So is there inheritance tax to be paid for the compensation of the farm land 

I spoke to my accountant who confirmed there is no capital gains to be paid and referred me to a inheritance tax specialist who was unable to give definite awnser 

So is the corrective to be paid or not ? 

Cantonathecat 




 

I think you're hopelessly overestimating what a site like this can do, based purely on a few sentences and no sight of any documentation. Maybe contact HMRC, either via your accountant or your solicitor - or indeed the IHT specialist - who have the full picture and, crucially, are insured to give advice.

cantonathecat

Thanks just wanted to get some opinions on which way to proceed 

Keep_pedalling

You don’t provide enough info. What was the value of her estate at the time of her death? How much compensation have you received? What was her marital status? Was she resident in the UK?

cantonathecat

Keep_pedalling said:

You don’t provide enough info. What was the value of her estate at the time of her death? How much compensation have you received? What was her marital status? Was she resident in the UK?

Uk resident divorced 
Estate was £ 520,000.(7k paid tax) 
Compensation is €150,000 Farmland and olive trees 

My original solicitors who did the probate advise that they have no firm conclusions as its such a 
as such a niche case and might be better to pay the 
Corrective 

My accountant says there's no capital gains tax to pay

Maybe its better i contact hmrc directly and get a response from them as due to the complexity 

mta999

You have obtained probate and settled inheritance tax but have subsequently found a new asset

in my view you have to report this to HMRC and calculate the estate's new tax liability based on the value of this asset

cantonathecat

mta999 said:

You have obtained probate and settled inheritance tax but have subsequently found a new asset

in my view you have to report this to HMRC and calculate the estate's new tax liability based on the value of this asset

Thats what I thought but since its compensation due to compulsory purchase  and that its farmland with olive trees that  there's no definite awnser in the hmrc handbook there seems to be contradiction on farmland relief and compulsory purchase due to archligogical finds and.if it qualifies for Agricultural Relief 

Savvy_Sue

I'm just wondering - but does this fall under UK estate at all? 

Keep_pedalling

Savvy_Sue said:

I'm just wondering - but does this fall under UK estate at all? 

If the OPs mother was a UK resident then yes. 

cantonathecat

At the time of death there was 100 percent relief on farmland in the European economic area 

Keep_pedalling

cantonathecat said:

At the time of death there was 100 percent relief on farmland in the European economic area 

That is true, but HMRC say it needed to be claimed by April 6 2024 rather than based on the date of death. 

https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax