Compensation after probate

cantonathecat

Keep_pedalling said:

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

You can pass on some agricultural property free of Inheritance Tax, either during your lifetime or as part of your will.

A will was.latwr found which the land was left to me. It was 9n greek and we didn't even know it was a will 

And the agreement ro the compensation was made before 6th April 2024  its  taken the Cyprus government two years to pay we was at the point taking them to court and getting the ombinsman involved due to the payment is compulsory purchase it also makes more complex
The inheritance expert said this is less than 1 percent case he has ever had to deal with

I think it will end up been referred to HMRC by my solicitors and will be interested what they decide 🤔 

NorthYorkie

cantonathecat  Please ignore the comments about Agricultural Property Relief. The fact as you have given them are:
1. The land was compulsorily purchased by the Cypriot Government in 1971
2. An offer of compensation was made by the Government in 1982 of an amount, at present unknown, on which no action was taken.
3 Your mother died in 2020.

Therefore at the date of her death she did NOT own any land in Cyprus. What she had was a right to claim compensation from the Cypriot Government. That right needs to be valued as at the date of her death. This is not necessarily the same as the amount actually received some years later. It is a value, taking into account the circumstance at the date of her death and ignoring any circumstances which subsequently arose. A starting point for that valuation might be the offer made in 1982.

Inheritance tax will be due on this value, (unless it could be claimed that, although resident in the UK, your mother was in fact DOMICILED in Cyprus, but this will not be possible if she was resident in the UK for 15 out of the last 20 tax years before her death)

As far as you are concerned, you have inherited an asset (this right to compensation) on your mother's death at its value at that date and you will have made a disposal of it for Capital Gains Tax purposes for the amount you have received, The gain is the difference between the two figures, less the costs you have incurred in negotiating the settlement with the Cypriot Government.

You suggest that you have recently discovered a Will made by your mother. Clearly you need to have this translated as it might reveal other assets your mother held in Cyprus.

You really need to speak to a professionally qualified adviser who specialises in tax, e.g. a Chartered Tax Adviser (CTA) or a member of the Association of Taxation Technicians (ATT). Your current solicitors/accountant and 'inheritance tax expert' do not seem to be on the ball.

Marcon

cantonathecat said:

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

If subject experts who have all the facts can't answer you, opinions based on close to zero knowledge aren't going to be of any use - and indeed could simply serve to mislead.