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Ask Clare Your Own Question
Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34581
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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I asked earlier if I should present all my questions on this

Resolved Question:

I asked earlier if I should present all my questions on this item together, but I decided one-by-one may be better: My ex-wife died in April of this year 2015. I returned to the UK in April, after 20-plus years overseas. I am currently living in her house
rent free in exchange for maintaining occupancy (against illegal occupation}, payment of utlities &etc and upkeep of the surrounding gardens. [Quotes from Legal Charge] As part of our divorce, the house was changed to her sole name and I was granted a Legal
Charge on the property. Quote “the Repayment Date” shall be the first of the dates mentioned below 1. Remarriage of the morgagor [my ex-wife] 2. Death of the morgagor [occurred April 2015] unquote 3 & 4 not applicable The Legal Charge to “an amount equal to
50% of the net proceeds of sale of the property after deduction of: - 1. Amount necessary to redeem the existing mortgage [already paid up] and 2. Costs of the sale” {No other conditions} “The Mortgagor hereby covenants with "me" to pay "me" the Specified
Sum on the Repayment Date with interest thereon at a rate of 2% above the Base Rate of Barclays Bank PLC ruling on the Repayment Date….from the Repayment Date until the date of actual payment” The Legal Charge and the Specified Sum of interest secured shall
have priority over any other further charges that may from time to time be secured on the Mortgaged Property and shall be second in priority only to the First Mortgage. [End of quotes] [A second Charge applies to The Legal Aid Society] Our three siblings are
the main beneficiaries with 25% each (with two nieces at 12.5% each) An offer of £550,000 has been made for the property and accepted by the main beneficiaries.. Assuming cost for sale for the property is around £10,000 (actual estimate by probate solicitors
was put at £6,000 and no estate agent is involved). As I see it, my |Legal Charge amount to: Balance £540,000 x 50% = £270,000. Question 1. Is the estate subject to Capital Gains Tax on the whole £550,000? Thank you
Submitted: 2 years ago.
Category: Property Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question
My name is ***** ***** I shall do my best to help you.
The Estate is not liable for Capital Gains Tax at all.
For Inheritance Tax purposes the Value of the property will be part of the Estate and the monies due to you will be part of the liabilities.
I hope that this is of assistance - please ask if you need further details
Clare
Customer: replied 2 years ago.
Thank you Ms Clare
next
Question 2.
Is my Legal Charge (£270,000) subject to any taxation?
And if yes, does the tax fall under unearned income, etc?
Expert:  Clare replied 2 years ago.
No it is not subject to any Tax at this stage
Customer: replied 2 years ago.
Thank you again Ms Clare
That’s knocked 5 question down to 3
Question 3
As my Legal Charge (£270,000) does not incur tax, would there be any advantage to claim the interest due from the “date of her death up to the date of sale of the property” – currently 7 months at 2% above the Base Rate of Barclays Bank PLC.
I assume the percent is annual [although the Legal Charge does not specifically state that].
I calculate the interest as 2% x 270,000 x 7/12 = £3,150 if pro rata
Would the interest, in-itself, be subject to tax?
Reason for asking would be to minimize costs against the residual value of the estate; and I could then pass the interest back to my 3 siblings.
Expert:  Clare replied 2 years ago.
The daily rate is £14.79.You can claim it if you wish - no Tax involved
Customer: replied 2 years ago.
Thank you again Ms Clare
Finally
I have been asked to sign a Land Registry Form DSI as the solicitors “are required to provide a clear title to the property upon the sale to the buyers solicitors and to enable this we have to provide for removal of all Charges against the property”
However, the probate solicitors have not provided the value of sum due to me.
As I see it, if I sign the form and return to them, they may subsequently offer me anything but the proper sum due..
Question: Should the solicitors provide due settlement regarding my charge?
Thanking you in advance
David
Expert:  Clare replied 2 years ago.
It is not unusual to ask for this to be signed in advance and it doe snot permit them to offer you less than you are entitled toYou shoudl send it back and say that you are doing so on the basis that "it will be held to your order pending your receipt of the discharge funds"
Customer: replied 2 years ago.
Thank you, ***** ***** very, very much
David
Expert:  Clare replied 2 years ago.
You are most welcome - I hope all goes well
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