Penalties For Late Payment of Inheritance Tax

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newbie

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A family member inherited relatives house in 2006 and when they went to sell it to pay Inheritance Tax found huge complications with the title. Got it sorted out eventually.
Recession then hit and couldn't sell it until last year at a very reduced price.
Now they're looking at penalties on top of original tax of approx €46000
Anyone have any idea of what it will cost them in addition to this.
 
The title issues should have arisen during the estate administration period. Was that the case?
 
Sophrosyne said:
The title issues should have arisen during the estate administration period. Was that the case?
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Don't think so. From speaking to the family member, when they were told what tax was owed which was the sum mentioned, they told the Solicitor the house was going up for sale the following year only to be told that the house was never registered in the deceased owners name when they bought it so the original seller had to be tracked down
before it could be sold..
Hugely stressful for the beneficiary.
Hope this makes sense..
 
It is difficult to see how the property could have been vested in the beneficiary without first establishing title.
 
Sophrosyne said:
It is difficult to see how the property could have been vested in the beneficiary without first establishing title.
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Well unfortunately that's what seems to have happened.
When the beneficiary went to sell the property was only told then "sorry you can't sell as it doesn't seem to be in your relatives name" even though the deceased lived there for approx 10 years or over.
Seems to have been an oversight with the original Solicitor not registering the house properly in the first place.
Doesn't know at this stage if the final sale price will cover the tax owed on it now.
 
newbie said:
Well unfortunately that's what seems to have happened.
When the beneficiary went to sell the property was only told then "sorry you can't sell as it doesn't seem to be in your relatives name" even though the deceased lived there for approx 10 years or over.
Seems to have been an oversight with the original Solicitor not registering the house properly in the first place.
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The significance for CAT is that the clock starts ticking from the date the property is vested in the beneficiary.

From what you say, that would appear to be the date on which title was established.

I think your relation should discuss this with Revenue. He/she should not be at a loss due to a negligent executor, who should have discovered this during the administration period.
 
Hoping that this is the case. Thanks for all this.
Has been a nightmare from start to finish for the person involved.
Needed an outside perspective on this.
Shouldn't have happened.
 
Update on this.
They have received a letter from Revenue now looking for an additional€37000 in interest & penalties.
The house sale won't pay it.
How approachable are Revenue in relation to this with the original tax paid now and the problems with the title preventing the house from being sold earlier.
Would appreciate any advice.
 
Your family member should engage the services of a tax consultant, who has experience in this area, to make a submission to Revenue on their behalf on what exactly is the valuation date. Your family's solicitor should be able to advise on a suitable consultant.
 
Made an appointment with my own Solicitor to see a way around this.
They don't have any confidence in the Solicitor who handled the estate initially now.
 
Something not making sense here,if there person who bequeathed the house was not its registered owner then how could your family member receive it as a beneficiary.
 
john luc said:
Something not making sense here,if there person who bequeathed the house was not its registered owner then how could your family member receive it as a beneficiary.
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The deceased bought the house with cash we presume and lived there up to his death.
Solicitor mustn't have registered his name on deeds or whatever happens when he paid for it.
When the beneficiary went to sell it, was told it doesn't seem to be in your relatives name.
Solicitor then had to chase down original seller to sign whatever they had to sign.
The deceased was unaware of all this while he was alive.
 
Did your relative actually file a return? So the Revenue are just looking for the money that your relative declared that they owed them.

Was your relative living in the house before or after the death?
 
The Solicitor filed the return for the relative.
No, they never lived in the house with the deceased only inherited on the death of relative.
The original tax due has now been paid and now they're looking for interest and penalties which they have no chance of paying except by taking out a large loan.
 
You should, of course, consult your own solicitor.

My view is that …

The valuation date is normally the earliest of the following dates:

1. the date the property can be retained for the benefit of the beneficiary;

2. the date it is actually retained for the benefit of the beneficiary;

3. the date it is transferred or paid over to the beneficiary.

In other words, the valuation date relates to the point at which the estate is certain that the property can be retained for the benefit of the beneficiary

The title issues would have, at the very least, created uncertainty as to whether your relative could have actually taken the benefit.

In any event, good luck with your submission.
 
Update on this:
Finally got this sorted in favor of the beneficiary.
Revenue eventually accepted original Solicitor's mistake. Got most of the inheritance tax paid back as well.
 
newbie said:
Update on this:
Finally got this sorted in favor of the beneficiary.
Revenue eventually accepted original Solicitor's mistake. Got most of the inheritance tax paid back as well.
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A great resolution. Any tax consultant worth his/her salt would have sorted this, but as with many tax related issues, the taxpayer could have ended up paying the erroneous tax and penalties in the absence of advice to the contrary.

Nobody should EVER rely on Revenue for tax advice.
 
Gordon Gekko said:
A great resolution. Any tax consultant worth his/her salt would have sorted this, but as with many tax related issues, the taxpayer could have ended up paying the erroneous tax and penalties in the absence of advice to the contrary.

Nobody should EVER rely on Revenue for tax advice.
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Have to agree 100%. The tax consultant is the best approach. The Revenue official at the counter or at the end of the phone does not have the depth of revenue law necessary
 
Vanessa said:
Have to agree 100%. The tax consultant is the best approach. The Revenue official at the counter or at the end of the phone does not have the depth of revenue law necessary
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+ 1

Revenue are in the tax collection business, not the advice business. They have no duty of care to protect your interests and they routinely disclaim their staff's advice whenever it suits them.
 
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