Help, am i being conned by my solicitor?

[ubiquitous]

Fair enough, but the fact remains that the it would be next to impossible for anyone to calcluate a 'likely' CGT liability unless and until they have all the facts to hand, given the range of factors that may be relevant.

 

[mf1]

"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."

Section 1034 Taxes Consolidation Act 1997.

mf

 

[Camry]

"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."

Section 1034 Taxes Consolidation Act 1997.

mf

1034.—A person not resident in the State, whether a citizen of
Ireland or not, shall be assessable and chargeable to income tax in
the name of any trustee, guardian, or committee of such person, or
of any factor, agent, receiver, branch or manager, whether such
factor, agent, receiver, branch or manager has the receipt of the profits
or gains or not, in the like manner and to the like amount as such
non-resident person would be assessed and charged if such person
were resident in the State and in the actual receipt of such profits or
gains; but, in the case of a partnership, the precedent partner (within
the meaning of section 1007) or, if there is no precedent partner, the
factor, agent, receiver, branch or manager shall be deemed to be the
agent of a non-resident partner.​

That says that the Revenue can make a tax assessment against a non-resident person. That is not the issue here. The OP is not non-resident so this is not relevant.​

You see here is the paradox of the situation (and the issue that this section of the legislation tries to address). If the solicitor still holds the funds then the OP is not, legally speaking, in receipt of any capital gain and hence doesn't have any tax liability. So what is the solicitor doing assessing a tax liablity that technically doesn't exist because he/she has released the funds to the OP? The tax liability only accrues on receipt of the capital gain.​

And that is the point of s1034. This legislation allows the receipt to be imputed as soon as the transaction is completed in the case of a non-resident in order to prevent a tax avoidance opportunity, whereby the funds could go from the solicitor to an offshore destination, at which point it wouldn't be within an Irish tax jurisdication.​

So I still need to see where this solicitor obtains the legal right to withhold funds from a client in these circumstances.

Besides, even I (a non-lawyer) would happily take on this case, because the legislation clearly states that this section applies to income tax. Case dismissed.​

 

[ubiquitous]

Besides, even I (a non-lawyer) would happily take on this case, because the legislation clearly states that this section applies to income tax. Case dismissed.

Not quite

http://www.irishstatutebook.ie/1997/en/act/pub/0039/sec1043.html

Taxes Consolidation Act, 1997

1043 1997 39 Application of sections 1034 and 1035 for purposes of capital gains tax.

1043.—Without prejudice to the generality of section 931(2), of sections 1034 and 1035 shall apply, subject to any necessary modifications, to capital gains tax.

 

[ubiquitous]

If the solicitor still holds the funds then the OP is not, legally speaking, in receipt of any capital gain and hence doesn't have any tax liability.

Totally incorrect. CGT applies on the disposal of an asset, regardless of whether the vendor is in receipt of funds, or for that matter, whether monies change hands at all. That is why gifts of land etc are taxable to CGT.

 

[Camry]

Totally incorrect. CGT applies on the disposal of an asset, regardless of whether the vendor is in receipt of funds, or for that matter, whether monies change hands at all. That is why gifts of land etc are taxable to CGT.

So if Michael Lynn handled the sale of my investment property and he took off with my money I would still have to pay a CGT bill regardless of whether I received any money at all?

Don't believe it.

 

[ubiquitous]

http://www.citizensinformation.ie/categories/money-and-tax/tax/capital-taxes/capital-gains-tax

 

[Camry]

This thread ios getting off track. This is what we know:

• The asset was passed to children on death - CGT does not apply.
• This asset was jointly owned by OP and siblings and used as PPR by OP and finally sold - CGT may be chargeable to siblings, not OP.

The issue is:

• The solicitor has retained the proceeds of the sale in order to "assess capital gains tax",

but

• CGT is a self assessment tax - the OP and siblings are individually responsible for declaring and paying any applicable tax.
• Any CGT would not be payable by the OP until October 31 this year anyway.

The question I posed still remains:

By what legal authority does the solicitor refuse to release the funds? As I showed s1034 does not apply.

 

[mf1]

"By what legal authority does the solicitor refuse to release the funds? As I showed s1034 does not apply. "

Did you read post 24 above? It may apply. If any of the OP's siblings are not tax resident, solicitor will be personally responsible for any CGT payable and, in reality, the only way to make sure that that does not happen is to discharge the entire liability.

I note OP has gone remarkably quiet.

mf

 

[Camry]

"By what legal authority does the solicitor refuse to release the funds? As I showed s1034 does not apply. "

Did you read post 24 above? It may apply. If any of the OP's siblings are not tax resident, solicitor will be personally responsible for any CGT payable and, in reality, the only way to make sure that that does not happen is to discharge the entire liability.

I note OP has gone remarkably quiet.

mf

But they may not be non-resident. That is what I would like to get to the bottom of.

 

[ubiquitous]

But they may not be non-resident. That is what I would like to get to the bottom of.

I would have thought that it is pointless to speculate further until/unless the OP clarifies this. As mf1 says, they have gone quiet.

 

[dodo]

Just curious , how many siblings are involved, eg if it was 5 and you are all entitled to 381K tax inheritance then only if the house was valued at more than 1.9 Million,I am open to correction but I thought this was the procedure providing money has not been given before.I would also ask him for bank statements showing the interest you have made with your money from the sale of the house.

 

[mf1]

Just curious , how many siblings are involved, eg if it was 5 and you are all entitled to 381K tax inheritance then only if the house was valued at more than 1.9 Million,I am open to correction but I thought this was the procedure providing money has not been given before.

OP is talking about CGT - the reference above is to CAT.

mf

 

[coolatjc]

I would have thought that it is pointless to speculate further until/unless the OP clarifies this. As mf1 says, they have gone quiet.

Hi all,

Just to confirm

I live in Ireland, but my brothers and sisters live in the UK.
There are 6 of us in total.
The house sold for €150,000. But after fees i think we will end up with €140,000 (legal fees and auctioneer) or so but this still hasnt been confirmed as the solicitor is still adding up the CGT!

Spoke to the solicitor today who said he is still trying to find out the totals, but he is blaiming revenue for taking so long. Surely revenue wouldnt take around 7 weeks?

Eitherway i checked the revenue website today and it seems to be a very simple calculation to decide how much tax should be paid on the profit of the house which would be divided by us all. So I really cant see what the hold up is?

thanks for the help

 

[mcaul]

It can take up to 3 months!

A range of issues will be covered including if the house has moved up in value since the will was executed (not likely in todays market) - if so standard CGT is applicable to in the increase in value since.

Also as some people are UK residents, this also has to eb taken into account as they will receive their subject to UK tax laws.

99% of solicitors are honest decent people, same as 99% guards, doctors etc etc. Its the one percent that we all worry about.

 

[coolatjc]

Hi all, and thanks again for your help and advice.

I have spoken to my solicitor and im still getting no where.

He has now informed me that he is still in the process of sorting out my CGT.

He has also informed me that he will be going on holiday in a weeks time for 2 weeks!

I guessing that basically means that I wont see my money for at least 3 weeks or more meaning that will bring the waiting time upto 10 weeks since my house was sold!

I asked the solicitor about the possability of taking €500 from each family member and keeping that to pay towards the CGT and giving us the rest of the monies divided between us.

He refused to do this saying that he didnt want to keep writing different cheques!

Surely I am instructing him?

My Brother is flying home from England to try and sort this out. He cant beleive like me how long this is taking.

Can anyone give me advice on how to take things next.

Is it reasonable for me to ask the solicitor to take €500 from each which would mean taking a total of €3,000 for a property that sold for €135,000 before fees for CGT?

And if he refuses as he has, do I have any legal power to say sorry but thats what I want to do.

Also someone mentioned that the revenue can take 3 months, is there anyway I can pay the balance myself without the solicitor. Surely it must be a very easy calculation and then just a case of sending the money?

And the attitude of the solictor is tough. Considering im paying for this surely I should have some better basic rights to get my money and that ten weeks or more is simply unfair to have to wait to receive money from the sale of a house!


What I really want is something that I can go into the office of the solicitor next week and basically say stop taking the mick and under section something of Irish law you have to do this and pay me my money!
In a nice PC way!

Thanks for any help in advance!

 

[MOB]

"Is it reasonable for me to ask the solicitor to take €500 from each which would mean taking a total of €3,000 for a property that sold for €135,000 before fees for CGT?"

No - within this figure of €135k, there could be a capital gain of €35k (i.e. tax of €7,000) or there could be a capital gain of €100k; Without all the facts it is impossible to know, but it is most unlikely that the tax bill will be as small as €3k.

"And if he refuses as he has, do I have any legal power to say sorry but thats what I want to do. "

It depends. One possibility might be (I emphasise that it might not be possible - because we do not have all the facts) for the solicitor to get the written authority of all your siblings to remit the money in its entirety to you, You can then divide it out. Of course, if there is an underpayment of tax, you will then be the one responsible to the Revenue- but presumably that is a risk you are happy to take.

 

[Bronte]

OP - suggest to the solicitor that he keeps 20 % ie 28,000 of the 140000 sale price less costs figure you mentioned. He would be more than covered then if there was a tax liability. I too thought that as it's a self assessment tax it was nothing to do with the solicitor, I don't know why but I thought they only had to hold on to it only in cases of a sale of more than 500000 but I'm not sure on this.

 

[dazza21ie]

OP - suggest to the solicitor that he keeps 20 % ie 28,000 of the 140000 sale price less costs figure you mentioned. He would be more than covered then if there was a tax liability. I too thought that as it's a self assessment tax it was nothing to do with the solicitor, I don't know why but I thought they only had to hold on to it only in cases of a sale of more than 500000 but I'm not sure on this.

OP has already said that some of the parties involved are non-resident, therefore, the solicitor is secondarily liable for CGT. If i am secondarily liable for CGT I will make sure that the tax is paid or will be paid before the proceeds are distributed.

The €500,000 limit you are thinking of is the threshold for where a CGT Clearance Certificate is required on closing of a sale. If the vendor's solicitor doesn't provide this on closing the purchaser's solicitor forwards a percentage of the sales proceeds directly to the Revenue.

OP's solicitor should really have flagged this from the start and should have done a calculation after the sale closes so that the majority of the funds could have been released immediately.

 

[Gordon086]

I sold a house last year and the solicitor left it up to me to sort out the CGT, which is as far as I'm aware the correct way to do it. Depending on the date you sold the house, I think you may have up to nearly a year before the CGT deadline, and would be better off with the money in the bank for those months and waiting to pay the CGT at the last minute before the deadline.