Paying CAT although taking time to sell the house?

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Not_near_it

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Hi all,

My father inherited a 1/3 share in his sisters house.
His sister passed away in November 2022, probate was approved in September 2023.

The house has been for sale since but hasn’t sold.

Just looking for advice on what he should do regarding tax right now.

Thanks.
 
The valuation date may well have been the date of probate - as this is when the property passed to your father.

Any CAT tax due is payable by Dec 31 2024 - Valuation dates between Jan - Aug => tax by Dec 31 of the same year, Sep - Dec => by Dec 31 following year
 
The house went sale agreed last year but the buyer pulled out, up for sale again and apparently sale agreed but no contracts signed yet.

What happens if he doesn’t have the money to cover his liability this year, he has no savings to speak of.
I know he has gained an asset in the eyes of the revenue but he hasn’t received any funds.
 
I think you mean CGT?

It isn't 100% correct that the date of valuation is the death of death rather than the date of probate -it depends on how the property passed from the deceased to the recipient

I personally know someone you had to pay CAT on a property long before it was sold as the sale was delayed for a long time due to various issues with the property. Revenue charged interest and late payment fees
 
The key date here is the Valuation Date. That determines when the tax is payable.

In most cases the Valuation Date is the Date of Grant of Probate so looks like Sep-2023 to me in this case

HOWEVER if your father lived in the house and continues to live in the house then he effectively has possession since his sister died so then the Valuation Date will be Date of Death so Nov-2022

Assuming the Valuation Date is Sep-2023 as above this falls into the CAT year of y/e 31/08/2024 so therefore the CAT is payable by 31st October 2024

A couple of different solicitors have said to me that no CAT is payable if the person receiving the inheritance hasn't actually received any money yet. I personally have my doubts about this. Solicitors are not tax advisors but they would generally have more practical experience of dealing with this than a lot of accountants. But I would strongly recommend talking to Revenue and explaining that no money has yet been received and the money will be paid when the money is actually received. This MAY help to avoid interest

NB - the CAT return IT38 absolutely HAS to be submitted to Revenue by 31st October 2024 regardless of whether your father has received any money or not at that stage

NB - there may be a Capital Gains Tax (CGT) return due here if the value of the property has increased between the Date of Grant of Probate (Sep-2023) and the date of sale of the property. IMO the CGT return(s) should be filed in the name of the person(s) who inherited the property as opposed to your aunt's estate although I have gotten some conflicting advice here in the past
 
DB74 said:
NB - the CAT return IT38 absolutely HAS to be submitted to Revenue by 31st October 2024 regardless of whether your father has received any money or not at that stage
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This is overwhelmingly likely to be true, but not 100% guaranteed to be so. The iron rule is that the filing due date is determined by reference to the valuation date which is normally either the date of death or the date of grant of probate but in certain limited circumstances can be another, possibly later, date.
 
If your father is inheriting through the residue/valuation date will be date of ascertaining residue, so could be actually when property is sold and net residue realised. In any case, he needs to check this and get tax advice. If he has a liability and he doesnt have funds to pay, he could apply to Revenue to pay by instalments if hardship/exceptional circumstances.
 
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