Inheritance Tax Worries

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sardonic

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Writing this on behalf of a family member. She inherited a house 6 years ago and due to a soliciter cockup found out she could'nt sell it because it was never regististered in the previous owners name until recently.

She is close to a nervous breakdown over the house as it is in bad condition and the only option would be to knock it and start again. She has approached the Revenue but they want their money and penalties on top of what she owes.

She can't afford the inheritance tax as she can't sell it to pay it. Any advice or ideas gratefully accepted. Thanks for reading.
 
You haven't given enough details for anyone to help.

What value is the house. What was the relationship. When was the death, when was probate extracted.

What do you mean by a solicitor cock-up? If she wasn't in beneficial possession of the house until the title was sorted out, why is she owing penalties? Has she actually taken tax advice?
 
She inherited house in 2010 and decided to put it up for sale to pay the tax.
The house is not in very good condition so no interest in it.
But when she told the probate solicter she intended to sell it, they told her it had not been registered in her relatives name when they bought in the 1980's. So they had to track down the seller to get them to sign over ownership.

We think her relative might have paid cash for the house and never checked to see if the deeds were in her name.
 
Is not this business about the house being not registered besides the point ?

Are we assuming that there is now no problem over inheritance/ownership and the only question is how can she pay tax when there is no money available and the property is unsellable ?

This is where the Revnue and the lady have to agree a value. If she now has proper ownership then she must put it up for sale at the price the Revenue estimate and if it fails to sell then she has grounds for an appeal.
The solicitor must have advised this as there are many cases where value has been debated and the Revenue have backed down after it has been proved that their value was too high.

Sadly in this case the Revenue will argue that it is the value in 2010 that counts and ,unless the house is in Dublin, prices have dropped since 2010.
 
You still haven't answered all the questions so the advice that can be given is minimal.

However, IF the title was not in order, and IF it was only sorted out recently, then the date that the title was sorted out should be the valuation date, not the date of death or the date of probate and a case should be made to revenue about that. If that were done then there should be no penalties.

Furthermore she could apply to pay CAT by installment. This brings interest but if she cannot pay otherwise, then she may find it an option to explore.

Finally, it sounds like proper tax advice should be taken.
 
Perhaps you would provide the info Vanilla has requested advise can't be provided without a complete picture.

@oldnick, CAT is a self assessment tax so the Sardonic's relative would have filed a IT38 with a valuation on it. At this stage its not a matter of agreeing a value with Revenue the person filing the return provides the value.

I am surprised the probate can be extracted where title to the asset is defective. If as Sardonic says the property is worthless who provided the valuation?
 
The house is still in the name of the original seller so the person who inherited in 2010 can't sell it pay tax. In other words the inheritors aunt bought the house in the '80s and never checked to see if the ownership was transferred over to her name. The probate soliciter had to contact the seller who was'nt very happy about it and caused a delay with signing it over to her deceased aunt which has then has to be signed over to the inheritor. Still waiting to that to happen.

In the meantime she going to take independent legal advice.
 
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