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Hi there. My father is Greek Cypriot and jointly owned some

Resolved Question:

Hi there. My father is Greek Cypriot and jointly owned some land in the northern part of Cyprus. Since his death, 12 years ago, the title deeds were passed onto myself and my sister. Recently we have been looking at getting compensation for loss of the land from the TRNC Immovable Property Commission (IPC), in exchange for relinquishing the deeds.

I would like to know if I would need to pay any form of tax on this compensation. Note that I am a UK resident.

Thanks in advance.
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question. I am Sam and am one of the UK tax experts here on Just Answer.

Compensation usually has no tax consequence in the UK, and furthermore had you father sold the land as (I assume) a resident then he would not have been subject to UK tax.

However, this has since been passed onto yourself and your sister and due to the complexities of this, I would advise you to get a ruling from HMRC as although your father would not have had a UK tax liability arise (even if he was UK resident at the time of the claim) we then have the issue of the value increase between your fathers death and this claim date.
I would expect it to remain tax free, however as this clearly is a relevant issue for you, then you should get a ruling on it from HMRC, however word your letter is such a way that you have already made the claim - as HMRC will not answer hypothetical questions.

Let me know if you need the address to write to.

Thanks

Sam



Customer: replied 3 years ago.

Many thanks for your quick response. I suppose this may be further complicated by the fact that there was no mechanism to sell or obtain compensation until about 3 years ago when the IPC was first introduced. Also valuation of the land at the time of my fathers death will be quite difficult to ascertain.


 


Please provide me with the HMRC contact details.

Expert:  Sam replied 3 years ago.
Hi

Thanks for your response

That complication only arises due to the fact that your father is not alive, and the titles have been passed to you and your sister. Had your father still been alive, then he would not have been subjected to any tax on this compensation.

I understand to value the land will be difficult (if not impossible!), and feel sure that you and your sister will not have any tax liability,. but of course, I want you to have peace of mind, that this is the case.

So address both your letter and the envelope to the Technical team
HMRC
Pay As You Earn
PO Box 1970
Liverpool
L75 1WX

Or use your own tax office address

Let me know if you have any further questions, but if I could trouble you rate the level of service, it would be appreciated, as this ensures I am credited for my time

Thanks

Sam

Sam, Accountant
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