Soldato
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.
Family dispute incoming
- Thread starter potatolord
- Start date
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.
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Soldato
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.
Soldato
Can't wait for the denouement, this thread need an explosive finish.
Soldato
Oops.
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Soldato
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.
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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.
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.
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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
Soldato
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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.
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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.
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.
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.
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.
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Live stream up yet?
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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...
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...
- Joined
- 21 Jan 2010
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- 3,534
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...
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...
Soldato
Well done for trying to make your mum comfortable and not lay the pressure on. It doesn't sound like a fun situation to be in.
@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?
On face value it certainly seems it.
Don't feel bad, you've done absolutely nothing wrong at all.
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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.
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Soldato
@potatolord Surely you need to let your sister know she can no longer steamroller your mum. Help mum to get the high value item back, etc.