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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4416
Experience:  FCCA FCMA CGMA ACIS
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My Mum passed away in 2007. We were tenants in common in our

Customer Question

My Mum passed away in 2007. We were tenants in common in our property. Her will gave provision for my Sister to receive ONE NINTH of the value of the property when sold on.
The will originally stipulated a period of time in which the sale should take place. This with my sisters agreement has been deferred until now.
What are the tax implications regarding the legacy in view of the time elapsed for both me and my sister?
Help please!
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
Before I can respond I need to know a couple of additional pieces of information, please.
Did you occupy that property as your sole or main domestic residence? Was it let out at any time?
Once I have that I can proceed.
Customer: replied 3 years ago.
Hello!
Yes it was our sole domestic residence and was never let out at any time.
Expert:  bigduckontax replied 3 years ago.

You are always liable to Capital Gains Tax (CGT) on the gain between the eventual sale price less costs of sale and the probate value; not many people realise this. However, as it was your sole or main domestic residence you are entitled to Private Residence Relief (PRR). PRR reduces the gain by 100% to nil so on sale there are no CGT implications. The time delay is an irrelevance.

I do hope I have been able to bring you some good news.

Customer: replied 3 years ago.
Thank you for that!
Can I assume that my Sister will be able to receive the sum due to her without tax implications as well (despite the time lapse)
Expert:  bigduckontax replied 3 years ago.

There are no tax implications pursuant to the delay. Your Mother's estate will have met any Inheritance Tax (IT) due, but her estate would have to have exceeded 325K plus any charitable bequests plus any unused IT exempt portion from her original spouse's estate for IT to kick in anyway.

The delay factor does not matter; effectively you and your sister entered into a Deed of Family Arrangement to amend the provisions of your mother's will.

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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.
Customer: replied 3 years ago.
Thank you for your help and advice!
Expert:  bigduckontax replied 3 years ago.
Delighted to have been of assistance.