The new guru
Registered User
- Messages
- 9
You should call a number of recommended tax consultants and get a quote/estimate. They can charge anything from €150-€250 per hour and will be able to give you an estimate of the number of hours this issue is likley to take. That's the only way I can see that you are going to get a ballpark figure. You are unlikely to be charged anything in order to get such a quote.
Sprite
The whole question sounds to me to be a bit tenuous - anyone who would argue that there was not massive price appreciation in Irish land between 1998 and 2007 clearly knows nothing about the Irish property market. It sounds like you need to talk to an auctioneer & valuer, not a tax consultant.
If you're concerned about fees, get estimates beforehand. Is €500, €600 €1,000 or €x,000 worth it for peace of mind, in the context of the monies involved? You need to decide this yourself.
Do bear in mind, however, that no matter who you get or how much you pay, ultimately you will merely get an opinion. Others, including the Revenue may or may not agree with that opinion.
By the way, why are you relying on your solicitor for tax advice in the first instance? I would be alarmed that you do not seem to have got independent tax advise at the time of the 2002 valuation. If your solicitor did the tax work for you without knowing properly what they were doing, you now need a new solicitor.
I believe that the increase in the land value between the date of valuation and the date of sale would be liable to Capital Gains Tax at 20% and that the Personal Representative is liable to pay this before distributing the residual value of the estate.
Is this an Inheritance Tax issue, or a Capital Gains Tax one? CGT I think.
The OP says that Probate was taken out in 2002, and a certificate of discharge from CAT was issued around then also.
Now that means that Revenue have accepted the values for tax but most likely this was conditional on -
A. if the property is sold within 3 years of date of death, they reserve the right to reopen the question of value.
B if Agricultural relief was claimed, the relief can be clawed back where the sale occurs within 6 years of date of death.
Both of these conditional dates have now passed.
see Certificate of Discharge here
[broken link removed]
So I really don't see the problem here (for CAT anyway). The estate was administered, the relevant returns have been made, a certificate of discharge from CAT has issued, and 3 (or 6 for Ag relief) have elapsed. The Revenue cannot reopen this case at this stage for inheritance tax. If they could, that would mean that any inheritance at any point back in the mists of time could be questioned. I don't believe this is the case.
The problem the OP has is in relation to the length of time for the property to be sold. That is not a problem for Inheritance Tax. That will involve CGT. And possibly Income Tax if for example the land was let in the intervening period.
CGT will apply to the gain made since the date of death. The date of death value is the base date and the gain between this value and the sale price (with some indexation) will be subject to CGT.
Regarding the death of your other sister well, her estate is another inheritance, but it depends on who the beneficiaries are. I suspect given that she was not compos mentis, her estate will be divided on intestacy. This is a separate matter to the estate of the first sister.
So Guru, can you give us any other information on this? It looks like there is something else happening here, but it should not be Inheritance Tax.
Apologies if I have missed something important in the posts but I really cannot see Inheritance tax on the sale being an issue, given that the estate has already been administered and Revenue clearance has issued.
Forgive my ignorance on this matter but we are dealing with facts here. My sister died in 1997, the land was worth X on that date. In 2007 the land was finally sold while the estate was still being concluded for a far greater sum. These are historic events that cannot be changed so I am assuming that what the solicitor is doing is getting advice on what tax law says about those facts? I mean I am assuming there are laws dealing with these things. That's what the budgets are for, no?
How would an auctioneer be familiar with such laws? Why do you believe an auctioneer is best to be talking to about tax as opposed to a tax consultant?
So 4th Estate, you are of the opinion that Revenue cannot query the return due to the fact that the 3 or 6 year rule has now passed??
So if the wrong valuation was used and Revenue became aware of this now there's nothing they could do about it? I'd love to see the legislation to back your opinion up!
Incidentally I recently came across a case whereby an individual was not charging RCT for a number of years and it turned out that he/she should have been charging RCT. Revenue went back 8 years. The legislation states that if Revenue become aware of a situation they can go back as far as they like.
Without knowing a great deal about the case I presume your solicitor is wondering when did you obtain an absolute interest in the real property for the purpose of the valuation. Other points he might be looking at is whether there is a Pur Autre Vie Interest, I'd doubt based on the limited information provided that such a situation is involved.
I would imagine €300 per hour would be fairly average for a Tax partner who worked in a Big 4 firm and has now moved to a top twenty practice.
I would imagine €300 per hour would be quite expensive for someone who is working independently, naturally they wouldn't have the same overheads etc...
Your initial question would be can Revenue reassess the market value of the real property. This in itself should be very inexpensive. If it turns out that you do have an issue then you're going to start building up fees.
Oh once last thing, the prices I've mentioned are net of VAT i.e. before VAT and are only my opinion.
Consider this, the Revenue look at the CGT return and say, "oh Goodo, I will get them for undervalue in 1997" But wait a minute, that means that I will get a lot less CGT now, as the lower the value at date of death, the higher the CGT. Swings and roundabouts. Everyone is well aware of the volatility of the market in recent years, hence the absolutely unbelievable increase in CGT, whereas CAT increased more steadily.
Regarding the second paragraph: I've little or no idea what you are saying, please excuse my utter ignorance.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?