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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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, . I am selling one of my properties

Customer Question

Hello, My name is Dave.
I am selling one of my properties in a rented portfolio. I bought it in 1998 for £65,000 and have a further unclaimed expenditure of £20,000. I am selling it for £385,000.
I am donating £100,000 "of this sale" to a local charity and simply wish to guarantee that the inland revenue will not later come back and demand the capital gain on this donation.
My accountant is away at present and the charities accountant says that it is unethical to speak to me without their consent. The sale contract is due to be drawn up now to avoid loosing the sale, but I wish for further guidance and guarantee beforehand.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Here is the Gov UK's advice on this subject:
'You don’t have to pay Capital Gains Tax on land, property or shares you give to charity.'
You would be well advised to never let that 100K pass through your hands at all. Make arrangements for the vendor to pay that direct to the charity. Also keep full written records of what has been done in respect of this donation. This will enable you to head off HMRC in the event of some future investigation.
I do hope that I have been of some assistance to you in this matter.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3114
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
I am sorry to say that the answer you gave has not met approval with the HMRC.
they have stated that should this happen the way you have explained it, there is nothing to stop them coming back to me and saying " thanks, ***** ***** very generous of you but as far as we're concerned you there is nothing you have done to legally gift this from the property. Although you have clearly given the money out of the proceeds, we will not accept this.
We are now gifting 26% to the charity, Once on the deeds the charity will ask me to sell their share and the inland revenue will have no comeback.
By your answering Keith, and your disclaiming any responsibility for your answer, you could have cost me about 28k.
Ian also concerned that not only has this site got my money for an incorrect answer but that some future amount may be taken for membership that I had no pre warning about beforehand.
I look forward to your reply
Expert:  bigduckontax replied 1 year ago.
If you wish to have your fee refunded that is quite in order, but you must apply to Just Answer administration for that purpose.
The fact that HNRC claim that the gift is not a gift at all is simply an attempt by them to prevent proper tax treatment. They would rather have the tax. Your next step is simple, appeal against their opinion. Presumably you have this in writing and not by verbal transmission? My original answer was an extract from UK Government's own advice web site. HMRC officials should be referred to that information.
Customer: replied 1 year ago.
Okay I will take your word for this in this case. There is little chance of the HMRS giving you anything on paper.
I would though prior to rating you answer like the referances of the website and its address
With thanks
Expert:  bigduckontax replied 1 year ago.
My advice is never, ever, under any circumstances whatsoever, communicate with HMRC other than in writing. There is far to great a chance that they will get hold of the wrong end of the stick if they can even find the stick at all which has clearly happened here. With the written you have hard copy evidence of what has been discussed. At least one other expert on this site, and an ex HMRC person to boot, has stated that HMRC will always confirm a verbal opinion in writing if requested.
Here is the relevant UK Gov advice site:
https://www.gov.uk/donating-to-charity/donating-land-property-or-shares
I hope that you can now see your way clear to rating me.
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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