Help, am i being conned by my solicitor?

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coolatjc

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Hi all, I have a question to ask,

Am I being conned by my solicitor?


I have been living in a home with my own family that was left to my brothers and sisters including me for the past ten years that was left to us by our late parents.

I recently moved out with my familyto a new home and the decision was made by all of us to sell the family home as noone had any further need for it.

We sold the home 7 weeks back, the house exchanged documents and the keys have been handed over. No problems.

My Solicitor then paid the auctioneer and took his fees but then stopped before paying my brothers and sisters and me stating that he had to sort out Capital Gains Tax.!

Now im not sure if we do or dont have to pay this tax, the solicitor said he would look into it. Eitherway 7 weeks have now passed, we no longer own the home and have yet to receive a single cent in any of the money.

Is this right? Can my solictor withhold the money? Ive asked him what is going on and he simply says he is sorting it out!

Am I being conned, what can i do legally?

Please help!!!!
 
Very likely there is CGT payable. The solicitor may have a responsibility to Revenue for this if you do not pay it.

However, he should have told you about this and worked through the likely figures with you in advance.

So you need to check with him what is going on, what, if any, CGT is payable and, specifically, when you can expect payment of the balance. Do this in writing and ask for him to come back to you within a specific time line.

If he does'nt, then you could consider resporting him to the Law Society although, as a practising solicitor, obviously, I think that should be a last resort.

mf
 
thanks for the reply,

just one more question, is 7 weeks plus a reasonable time for my solictior to take to sort out CGT? Or is he just taking the mick making interest on the balance?

What sort of time scale does this normally take to sort out and pay CGT?
 
I think you need to talk to your solicitor.

It is quite a long time but then dealing with Revenue can take a long time.

Really, this should have been brought up earlier. Perhaps it was. It is also highly unlikely that your solicitor is using the money to make a shed load of interest. Most solicitors want shut of their clients and their clients money at the earliest possible opportunity, given the latest round of solicitors' scandals which has led to a massive increase in Law Society audits.

If you are using the same language ( conned, taking the mick, etc.,etc) to your solicitor, you may not be flavour of the month. You should consider adopting a slightly less "offensive" ( as opposed to defensive) approach.

mf
 
Seven weeks is more than adequate time to work out a CGT liability.

I concur with MF1.

There may also be returns for each member of the family to make. Could it be perhaps the delay is that the Solicitor is arranging to have these drafted for each family member for signature?

You wont know until you request clarification in writing.
 
Thanks all for your advice.

Yes i am more PC with my solicitor and more careful on what language I use!
So I guess Ill write that letter and try to get some clarification.

Thanks again for you advice and help!
 
Isn't the house an inheritance and thus tax-free up to €381k?
 
I am not a lawyer, but this sounds very strange to me.

First, given you information, I don't see how you would have a CGT liability, given you describe this as your PPR.

Second, can any lawyers confirm whether it is the legally required practice in Ireland for a solicitor to assess tax liabilities. That sounds ridiculous and doesn't happen anywhere else I h know. For example, you aren't even required by law to use a lawyer for the transaction in the first place, moreover, how does this lawyer know what your CGT liability would be? He doesn't have all the information and it is you tax liability not his.

And finally, if all this was above board, all this would have been addressed in advance of completion.
I would go get some independent advice. Recent events have left me with no confidence in the propiety of lawyers in Ireland. (With apologies to those present)
 
The property appears to have been left to all the brothers and sisters so even though it may have been OP's PPR it is not theirs solely. So more than likely there is a significant CGT liability.

Yes, it is the taxpayers liability but in some circumstances the solicitor carries a very significant responsibility ( e.g. as agent for non resident tax liable owners) and they ( the solicitor )should make sure that any CGT liability is discharged or else they will carry the liability.

While I appreciate that recent events have very much exposed how significantly a solicitor can "screw" the system, the banks and their clients, it would be wise not to jump to any conclusions about the solicitor in the situation as presented.

And if we could all remember, you hear one side of the story only on boards like this. It is better to try and tease out the likely/possible issues before jumping to (potentially) entirely incorrect conclusions.

mf
 
If you don't trust your solicitor or want a second opinion, get an accountant to advise you on the capital gains tax issues and liability if any.
 
As MF1 says, there may well be good grounds for the solicitor stating that he\she has some liability on the CGT. However, there is no good reason to retain 100% of the sale proceeds while resolving this. There are two possible taxes - CGT and CAT. A provision can be made for the maximum exposure on each tax. The balance can be released. That is what I would do in the solicitors position. The beneficiaries should ask their solicitor to do likewise.
 
How difficult is it to calculate CGT?

I thought it's 20% of any gain of the value of the asset over time less the allowance and the cost of disposal (estate agent & legal fees), so it should be;

(Sale price - acquisition value) x 0.2

Also, I didn't know the solicitor was responsible for ensuring it was paid. When I sold an investment property a couple of years back, the solicitor provided an estimate of the tax due, but it was up to me to make the return.
 
mf1 said:
The property appears to have been left to all the brothers and sisters so even though it may have been OP's PPR it is not theirs solely. So more than likely there is a significant CGT liability.

Yes, it is the taxpayers liability but in some circumstances the solicitor carries a very significant responsibility ( e.g. as agent for non resident tax liable owners) and they ( the solicitor )should make sure that any CGT liability is discharged or else they will carry the liability.

While I appreciate that recent events have very much exposed how significantly a solicitor can "screw" the system, the banks and their clients, it would be wise not to jump to any conclusions about the solicitor in the situation as presented.

And if we could all remember, you hear one side of the story only on boards like this. It is better to try and tease out the likely/possible issues before jumping to (potentially) entirely incorrect conclusions.

mf
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I am making no accusations at all. If someone is holding on to money that belongs to you and will not release it I would go get a second opinion. Simple as that.

The rest of what you write is supposition, rationalisation and guesswork. I still think this sounds strange. It won't hurt to ask the opinion of someone who isn't in possession of you money.

Here, from the Revenue FAQs on CGT:

13. How do I calculate my tax?
Capital Gains Tax is a self- assessment tax. Regardless of whether you are registered for tax purposes you must calculate and pay your tax and file a return of gains and losses without being requested to do so by Revenue
Click to expand...

Go get some advice.
 
j26 said:
How difficult is it to calculate CGT?

I thought it's 20% of any gain of the value of the asset over time less the allowance and the cost of disposal (estate agent & legal fees), so it should be;

(Sale price - acquisition value) x 0.2

Also, I didn't know the solicitor was responsible for ensuring it was paid. When I sold an investment property a couple of years back, the solicitor provided an estimate of the tax due, but it was up to me to make the return.
Click to expand...

In practical situations, CGT can be a lot more complicated than you make out. The determination of variables such as acquisition values, enhancement expenditure, the extent of applicable PPR exemption and other factors can get very awkward if you don't know what you are doing. And if you get it wrong, there can be very unpleasant consequences.
 
j26 said:
Also, I didn't know the solicitor was responsible for ensuring it was paid. When I sold an investment property a couple of years back, the solicitor provided an estimate of the tax due, but it was up to me to make the return.
Click to expand...

Whilst it unclear from the op's post if this applies, in circumstances where a one or more of the vendors is non resident - the solicitor must ensure the CGT is paid
 
OP what was the value of the house when your parents died and what year, also what was it sold for. How many of you are there, did both parents die at the same time, are all of the beneficiaries living in Ireland. If you give details like this then maybe someone on here could calculate the likely CGT tax. It's highly unlikely a house split between many brothers and sisters, inherited from parents would have a CAT liabity. Some, not all solicitors hang onto money to earn interest. But as far as I know you are entitled to that interest. If your not happy you should visit the solicitor and enquire what is going on, as previously stated he could be having problems in dealing with revenue.
 
juke said:
Whilst it unclear from the op's post if this applies, in circumstances where a one or more of the vendors is non resident - the solicitor must ensure the CGT is paid
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This situtation interests me. Are you a solicitor with experience in this area?

If so, can you point me to the legislation that provides solicitors with the right to withhold client funds? It might come in handy some day.
 
Bronte said:
OP what was the value of the house when your parents died and what year, also what was it sold for. How many of you are there, did both parents die at the same time, are all of the beneficiaries living in Ireland. If you give details like this then maybe someone on here could calculate the likely CGT tax.
Click to expand...

Its difficult to believe that someone on this board could calculate the OP's tax liabilities without meeting them or at the very least after having a detailed conversation with them in relation to the circumstances of the case, and an examination of the various documents available in relation to acquisition, disposal and other relevant information.

To suggest otherwise is reckless imho and would be likely to get the OP into trouble were they to proceed on the basis of an incorrectly calculated CGT position.
 
I agree with Ubiquitous that the CGT calculation if far more complicated that you realise. I think also inheritance tax is being confused here. inheritance tax if any should have been deal with when the house was transferred into yourself and your siblings names. In relation to Capital gains tax the share of each will be calculated, then how long did each live in the house as their PPR. There are exemptions and periods of deemed residence that can alter this calulation which is basically calculated to the number of days. You may not have to pay tax as your share is probably covered under the PPR rule but your siblings period of PPR will have to be calculated over ten years. has the solicitor got all the information he needs in relation to this. Is he/she waiting any additional information from any of your siblings? Also indexation (a sort of calculation which tried to account in some way for inflation) will be applied to the value of the house when inherited. There are alot of things to take into account - the solicitor may have to employ a tax consultant to assist.
 
Sorry Ubi but I did say 'likely' CGT liability, I never suggested the OP should calculate his tax himself, but there is nothing wrong with him doing so if he wants. I was just giving him an alternative suggestion - isn't that what AAM is for? Some people, especially on here are able to calculate it quite easily, and if he gave more details then it might come to light why it is taking so long for the solicitor. Of course one should get independant professional advice but one is entitled on AAM to get all suggestions/ideas but they ultimately have to use their heads and decide what is best for themselves.
 
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