Can you defer CAT with Revenue Agreement

[3littlefish]

I have a scenario that I would welcome some advice on.

If know of 2 siblings about to inherit a property. These siblings are at war with each other. Very messy, no change of reconciliation or amicable agreement.

This property is very valuable and each would have a CAT bill of approx €300k based on current value and CAT thresholds.

Sibling "A" has the funds to pay her CAT bill but sibling "B" doesn't have any. Sibling A knows this and is going out of her way to make life difficult for B. A is refusing to speak to B and is not prepared to sell the property or buy B out so that B can obtain the necessary funds to pay his CAT bill.

Can B go to Revenue and plead for more time, or at least get a waiver of interest and penalties until the property is sold. This will most likely end up in court to force A to sell or buy B out, which could take months or even years?

B is feeling under extreme pressure to forgo his inheritance as he doesn't want to have this huge CAT bill that he cannot pay off and he has no funds to bring A to court. This seems very unfair

Any suggestions?

 

[MOB]

There are a lot of variables here. Sibling B needs to take detailed legal advice. When you say 'about to inherit' do you mean that someone is about to die? Or that they have died and the house is about to be handed over by the executor?

Best case scenario: B asks (or forces) the executor to sell the house; gets agreement with Revenue that the inheritance consists of B's share of nett sale proceeds, and that valuation date (which in turn triggers tax payment deadline) arises when house is sold and nett proceeds ascertained. It is impossible to say if such an outcome is possible without detailed\case-specific instructions.

If sibling B does not already have a solicitor, he should get one pronto.

 

[3littlefish]

thanks MOB,

appreciate the reply.

to clarify.
deceased died intestate. There was a debate about who "deserved" to inherit the property.
Both A and B have been exchanging solicitors letters over this matter.
It has been established that A and B both have equal claim on property.
as far as i know it is the deceased's own solicitor who was asked to be administrator for the estate.

Can the administrator of an estate be "forced" to selel the property?

 

[MOB]

I am sorry - these facts do not gel. It may be that the deceased's solicitor is handling the administration, but it would be very odd for the solicitor to be the administrator. I think B should rely on getting detailed legal advice. I would be reluctant to hazard a guess as to the best course of action without going through the thing in more detail than is appropriate for AAM.

 

[Mini3277]

Has B got any hope of raising the money without the property being sold?

Very unlikely that Revenue will accept a deferred payment. I've never really seen it happen before.

Simple way out of it would be not to issue probate until such time that the dispute is rectified. I'm assuming the property didn't pass by survivorship.

 

[4th estate]

Inheritance tax due on real property can be paid in 5 equal annual instalments (interest is charged of course!). The first payment is due one year after the Valuation Date. This might give the sibling some time to breathe.

Then if the property is sold before the due date of the first or any subsequent instalment the taxpayer must pay all the tax outstanding at that point. I'm not sure what the interest rate on instalments is, a bit higher than a bank I would guess, however, the fact that the first instalment is one year after the Valuation Date is an option, allowing a bit of time for things to get sorted in the estate.

Also, Revenue have powers to compound and postpone the tax, but that is usually only in cases of severe hardship where a person would be forced to sell their home to pay the tax.