Family dispute incoming

SpellowHouse said:
There is a hefty fine if they do not report it. If you even suggest the house is under-valued then it will be reported. Whether the tax office do anything depends on the scale of the under-valuation.
Click to expand...
There’s no suggestion the house has been undervalued, merely given away, which is totally fine. We have no idea what his mother’s CGT position was so jumping on the tax evasion angle seems premature, to say the least.
 
One More Solo said:
There’s no suggestion the house has been undervalued
Click to expand...
Apart from it being explicitly stated in the opening post that is..

CGT is the responsibility of the seller anyway, it would definitely be due on a second home (non main residence) even if given away. Whether lawyers get 'massive fines' or a legal need to report it I have no idea.
 
Last edited:
200sols said:
Apart from it being explicitly stated in the opening post that is..

CGT is the responsibility of the seller anyway, it would definitely be due on a second home (non main residence) even if given away. Whether lawyers get 'massive fines' or a legal need to report it I have no idea.
Click to expand...
Apologies, I missed that. Doesn’t the Land Registry show the price paid rather than the valuation of the house? It’s entirely possible his sister paid something for the house that is less than market value rather it being a gift. Obviously CGT may be due on the difference.
 
One More Solo said:
Apologies, I missed that. Doesn’t the Land Registry show the price paid rather than the valuation of the house? It’s entirely possible his sister paid something for the house that is less than market value rather it being a gift. Obviously CGT may be due on the difference.
Click to expand...

Most people lie to avoid Stamp Duty, apparently. Course it would be a different matter if the house was gifted, then the "under-value" would be to avoid the limit of (what I think is) £325,000.

I don't know all the ins-and-outs, I just know that you have to take great care when trying to avoid tax.
 
Last edited:
SpellowHouse said:
Did you know it's illegal to under-value a house? It's called tax-evasion. I am actually surprised that the solicitor didn't report them, they are duty bound to do so.
Click to expand...

As others have said there's nothing wrong in selling a house under valued or even giving it away.

For CGT purposes it would be assessed at fair market value for Stamp Duty it just depends if there's a mortgage on the property, it's value and if you take it on.

No idea where you got this illegal idea from, it's something that happens often enough and the rules are all in place to deal with it.
 
Scougar said:
At the end of the day, regardless of 'fairness' it's still their money, not his. Should he feel peeved? Sure, I wouldn't be particularly happy about it if my family were treating one like the golden child, and me with nothing.
Click to expand...

But again that's a totally moot point we all know that it's their money.

If OP made a thread about how he can't be bothered visiting his mum as he thinks that old people suck and she's always phoning, crying about never seeing the grandkids - should the focus be on the fact he has the right to do that (we all know he has the right to do that) or the actual problem itself.

Or maybe he decides to cheat on his wife with multiple women - it's up to him who he consents to sleep with but there is still an underlying problem there and pointing out that at the end of the day, regardless of "fairness" he's an adult who can choose to cheat... is completely moot.

The point is there is an actual problem here regardless of the obvious fact that people are entitled to do unethical things.
 
Last edited:
Freakbro said:
As others have said there's nothing wrong in selling a house under valued or even giving it away.

For CGT purposes it would be assessed at fair market value for Stamp Duty it just depends if there's a mortgage on the property, it's value and if you take it on.
Click to expand...

Yup, though I guess in the OPs case both of those things likely do apply.

It's a second home so CGT does apply to the transaction - though if they've sold undervalued without realising this then I wonder if they even reported the CGT on the fake price?

And stamp duty - the threshold is £250k, if the house is worth £300k then "selling" it for a pittance has perhaps dodged that too - though maybe not - I guess in the case of stamp duty the solicitor would perhaps point out that it is due... unless they're saying it was nominally only worth £250k and not the OP's claimed £300k
 
dowie said:
Yup, though I guess in the OPs case both of those things likely do apply.

It's a second home so CGT does apply to the transaction - though if they've sold undervalued without realising this then I wonder if they even reported the CGT on the fake price?

And stamp duty - the threshold is £250k, if the house is worth £300k then "selling" it for a pittance has perhaps dodged that too - though maybe not - I guess in the case of stamp duty the solicitor would perhaps point out that it is due... unless they're saying it was nominally only worth £250k and not the OP's claimed £300k
Click to expand...
Conveyancers know all this and are obliged to inform people of everything that needs to be done and e.g. make the stamp duty payment. It's very unlikely tax has actually been dodged - the CGT is the only thing that could be dodged but even then all parties would have been informed what they should do and there's no evidence here to suggest they've acted illegally.
They don't just point out that it's due, they actually make the payment and won't proceed without having had the payment in from the client.

As soon as they were informed that the purchaser was a family member it kicks off a whole load of processes to cover the solicitors from accusations of tax dodging and so the mum would be fully aware what the penalties would be of just not paying CGT. The solicitors would have had to establish market value for the property as part of their own due diligence.
 
Last edited:
dowie said:
And stamp duty - the threshold is £250k, if the house is worth £300k then "selling" it for a pittance has perhaps dodged that too - though maybe not - I guess in the case of stamp duty the solicitor would perhaps point out that it is due... unless they're saying it was nominally only worth £250k and not the OP's claimed £300k
Click to expand...

It seems it doesn't matter for stamp duty if you give the house away (I would assume the same applies for undervaluing) just if the property has a mortgage over the threshold of £250k and the receipient takes that on is the trigger.

www.gov.uk

Stamp Duty Land Tax: transfer ownership of land or property

Find out if you have to pay Stamp Duty Land Tax (SDLT) on transfers of land or property depending on type of transfer, your marital status and other factors.
www.gov.uk www.gov.uk

If you get land or property as a gift or from a will​


If you’re left land or property in a will​


If you get land or property under the terms of a will, there’s no need to tell HMRC and you will not pay Stamp Duty Land Tax. This applies even if you take on an outstanding mortgage on the property on the date the person died. This is on condition that no other chargeable consideration is given.


If you’re given property as a gift​


If you get property as a gift you’ll not pay Stamp Duty Land Tax as long as there’s no outstanding mortgage on it.


You’ll pay Stamp Duty Land Tax if you take over some or all of an existing mortgage and the value of the mortgage is over the Stamp Duty Land Tax threshold.
Click to expand...
 
I see a lot of comments about not losing your relationship with your mother/family, but to be honest sometimes you realise your own family are complete **** heaps of people.

It could be better to cut ties with them if they are completely awful as it's often better to not have people like that in your life, even if they are your own family.

I would class unfair financial treatment between siblings for no fair reason within that. I'd expect explanations and guarantees in wills etc that I would end up getting equal treatment/equal inheritance in the end. If not, I'd be cutting ties.
 
Last edited:
UPDATE

I spoke with my mum earlier.

Went better than expected, but was not pleasant.

I told her I knew my sister is the owner. I asked why she hadn't involved me and she said she had told me before. I said she hadn't despite direct questions from me in the past. She then said it was because she thought I'd go mad.

I told her I would have definitely asked questions and we discussed what happened.

- house was given, not sold. No money changed hands.
- Sister didn't have anywhere to live. I pointed out she had been living there for about ten years already.
- sister told her the house couldn't be sold for structural reasons. No advice sought on this, taken on trust.
- Sister told her the house was worth half its true value. No valuation was done as my mum took her at her word.
- Sister told her the council were going to compulsory purchase the house. No evidence provided, again taken on trust.
- my mum's maths is poor and thought if she gave me half of (unrealistically low) value, we would have had a fair share. That would be around a quarter of true value.
- Mum covered the costs of the solicitor etc for the transfer of house.

.More to follow...
 
Continued...

Mum was gutted.

She said she'll give me £££££. I said she can't give me her savings, and I won't accept it anyway.

She said she'll have to sell her house, and give me money. Again, I said no as that's just foolish talk.

The will is 50/50, and now my mum has realised that my sister has already benefited. She's not happy and now wants to change her will. I told her to think carefully about that, before doing anything.

It then came up that my sister has a high value item of mum's (>£10k) with all receipts and documentation associated, in her house. She said she wanted to buy it, but no money has changed hands. She's had it for at least six months. My mum has asked her to return it, but she hasn't.

After all that I am fuming. I'm not sure whether this is coercion or whatever but something stinks.

I felt better for having got it out in the open, and my mum said the same, but I feel bad for giving my mum the knowledge.

I told my mum it's up to her if she wants to talk with my sister about it, but I have had enough of her (sister) and see no good coming from talking to her.

Christ knows where this is going to end up.

Just got home, so will ring my mum later to check up on her, after this horrible shock. She seemed OK when I left, but y'know...
 
@potatolord sounds like a pretty bad situation all round and it sounds like your sister is behind it. Sad to hear your Mum feels bad about it. At least you got it out in the open / off your chest. Will you talk to your sister about it?
 
potatolord said:
Just got home, so will ring my mum later to check up on her, after this horrible shock. She seemed OK when I left, but y'know...
Click to expand...

You are in a horrible situation and I sympathise enormously.

I'm glad you have managed to get things out in the open and hope you can rebuild from there.

I'm currently in almost exactly the same boat, and your courage has given me the kick up the backside to do the same. Maybe.

Call her, and keep talking to her, now that you've broached the subject. That's the only thing I can say. I wish you well.
 
Last edited:
You must log in or register to reply here.
Back
Top Bottom