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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25424
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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If i buy land off my gran slightly below normal price

Customer Question

If i buy land off my gran for a slightly below normal price and she dies within 7 years will i have to pay inheritance tax or any other tax ? The land is valued at 5-7 thousand pounds per acre and is 3.5 acres. I am paying £12,000 and intend to develop the land into a small cul de sac with a re sale potential of in exess of £1000 000.

Could there be any sort of come back ?  The land is not yet registered but i will do this on completion of conveyance.

Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience. May I ask to the best of our knowledge what roughly would you say your grandmothers estate is likely to be worth overall including all her assets including the land please?May I ask if she was married and if so is your grandfather still alive or has he passed away? If he has passed away did he leave all his assets to your grandmother?
Customer: replied 2 years ago.

Having looked on right move i would say her bungalow is worth about £250 000 tops. Cash wise she is pretty dam poor having little savings and a tiny state pension due to living most of her life out of the uk. She is married but my grandfather has emphysemia and i would say he only has about 3 years left himself. My grandmother drinks although she has been hospitalised (the last time for a couple of months, several years ago) and told not to drink so is a wild card. the bungalow will be split between my mother and my grandfathers two children from a previous marriage.

Expert:  Joshua replied 2 years ago.
Many thanks. Would it be alright with you if I responded to this in the morning. I am typing from my phone and cannot really do this justice on here. Is that ok with you?
Customer: replied 2 years ago.

One more question sorry. Is there any sort of trust instrument such as a private common law trust (not a public trust or an off the shelf) that could negate capital gains tax ? I would be grantor/setlor and bennificary and apoint a trustee. You may be interested in a book i am reading. You have been very helpfull so far.

Thank you.

http://www.amazon.com/The-Constitutional-Common-Law-Trust-Protection/dp/0962864021

Expert:  Joshua replied 2 years ago.
If I knew of one I would be a very rich tax lawyer. There is no easy way to avoid CGT if you are intending to sell. You can form a limited company and structure the deal through the limited company and pay corporation tax instead of CGT. You can structure the transaction to take account of reliefs and allowances (e.g. if you lie in a property before you sell it) but I am not aware of any legal way to avoid CGT. There may be some schemes that claim to be able to do this but many of these tax schemes that create artificial structures are coming unstuck with HMRC chasing down such schemes aggressively leaving clients having paid thousands in fees to a disappeared tax company oweing the full amount of tax plus interest.

I hope the above is helpful? Can I help you with anything else or has the above answered your questions satisfactorily? If you could drop me a quick message to let me know I'd be very grateful.
Joshua and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Good job well done.
The link I sent you was for the wrong book the one I meant was this one.
http://www.amazon.co.uk/Asset-Protection-Pure-Trust-Organizations/dp/1466399864

I'm sure if you were in the right cabal then this would fly. Very interesting either way. I'm sure you don't want to talk or read shop that may not be completely factual when you already have a very hard earned bar card.

Expert:  Joshua replied 2 years ago.
Thanks for the link. This looks to be US based related - I have no expertise in relation to US law. Certainly in this country avoiding CGT is not straightforward. I suppose if you established some offshore trustees and then shifted the property using a series of trust and subtrust so that ownership was not clear it could work. It would not be legal but this is how a lot of the super rich achieve tax avoidance (evasion) by simply hiding the true ownership of the trust assets so that it appears that there is no change in ownership when in fact there is as most tax is transactional based (i.e. it bites when there is a movement of ownership). That may be an option to the super rich but unfortunately for those of us living in the real world it doesn't work because we need mortgages, are not domiciled off shore and so on and so on.