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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3811
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Can my brother alter the terms of a Settlement Agreement requiring

Customer Question

Can my brother alter the terms of a Settlement Agreement requiring him to submit his HMRC CGT calculation? I have been in dispute with him since 2007 over him spending 20 years of income from a family owned property. as landlord he collected in £110,000
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
The solicitor I used
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I am surprised that HMRC were not all over him with penalties, interest and back tax in such a situation. Perhaps that is what the settlement agreement is all about. These agreements can be altered and often are to adjust level of payment options. HMRC would rather take longer for the taxpayer to pay and get all their money rather than the debtor going bankrupt and escaping liability. If you have been after him for your share of the rental income then that is a matter for a solicitor to recover your entitlement. You are outside the Small Claims Court limits so professional assistance is essential. I do hope my reply has been of some use to you.
Customer: replied 1 year ago.
The agreement was drawn up by my solicitor in an out of court settlement. My brother and sister produced two sets of accounts with overstated expenditure to 'lose' a lot of the money. At the meeting they did not produce any receipts or the paying in booklets but did admit to receiving £47000 in rentals so I was given a third of this and my this share of the proceeds of the house sale. They would receive their third shares once they had completed their self assessment tax returns to cover GCT and liabilities on rentals {they have not paid any tax on the rentals as my brother collected it in cash}. I have had to accept that I will never get all that is due to me but I now find that my brother is lying about the property being his principle private residence in order to reduce his CGT and he and my sister have used the Lettings Campaign scheme to bring their tax affairs up to date. Even though my solicitor was supposed to pay the CGT {she did pay my sisters} my brothers accountant {he is a self employed carpenter} is saying that the CGT is part of my brothers overall liability and has been paid already. My solicitor is waiting on the SA302 form to prove this payment. I think that he has breeched the terms of the agreement, is getting away with yet more cheating. My solicitor is holding back £30000 to cover any penalties from HMRC. In the meanwhile, my bill for all this continues to rise as she has been chasing my brother and his solicitor to settle the tax since June 2013 {when the agreement was drawn up!} I have already paid her £10000 for the period from 2007 to 2013. As things stand at the moment, my brother will get his third share of the property sale, has only paid about about £5300 back tax on the rentals and £1900 GCT {my sister paid £13000} in addition to pocketting about £30000 of rentals money from 2000 to 2010. My solicitor says that if I stir things up with HMRC I will be liable as I put the house in my name and sold it in 2012 in order to salvage some money from this mess even though my self assessment return states that I only received the money after the house sale and had nothing to do with rentals collection. I really need some clear thinking about this case. My solicitor wants it closed because her auditors see this client account still open after 2 years. I have said to her off my brother and give me all of the £30000 she is holding back but she says this will be breaking the terms of the Settlement Agreement but my brother, his solicitor and accountant have all ignored the terms of it by their actions anyway. Help. I should add that my brother and sister were required to send their tax self assessment forms to my solicitor with the amount required by HMRC so that she would pay the sums from the client account as the proceeds of the house sale are kept by my solicitor. This clause was inserted to insure that my brother and sister paid their dues and to protect me from thier liabilities if they defaulted.
Expert:  bigduckontax replied 1 year ago.
I wouls suggest that there is sufficient evidence for the matter to be referred to the law Society who, amongst other things, regulates that profession. However, recent media disclosure has revealed that that body is not much interested in pursuing their members. You could report it to the police, but again funding cuts have prevented the fuzz from handling such cases. The alternative, and much more costly route is to employ your own solicitor to take a High Court action to unscramble the whole ghastly arrair.
All in all, I fear that you may be in a 'Money Sunk and Lost' situation here. I am so sorry to have to rain of your parade.
Customer: replied 1 year ago.
Will form SA302 show HOW my brother has calculated his CGT? My solicitor has requested this information on at least 6 occasions to no avail
Expert:  bigduckontax replied 1 year ago.
If court proceedings are commenced he will have to supply this information.
Customer: replied 1 year ago.
What does form SA302 actually detail?
Customer: replied 1 year ago.
My solicitor has been out-manoeuvred. High Court is too costly
Expert:  bigduckontax replied 1 year ago.
A SA302 shows the tax calculation.
Customer: replied 1 year ago.
will it detail the years being claimed for Principle Private Residence relief?
Expert:  bigduckontax replied 1 year ago.
No, this relief is given automatically.
Customer: replied 1 year ago.
even of the person never actually lived there during the period of rentals?
Expert:  bigduckontax replied 1 year ago.
In that case the gain would be declared on the self assessment tax return and the tax due noted on the SA302.
Customer: replied 1 year ago.
But my brother is claiming that he did reside at the house. I lived there from 1994 to 2002. The house had tenants from 1995. My brother had his own house throughout that period.
Expert:  bigduckontax replied 1 year ago.
So he will be liable to CGT on any gain made on disposal.
Customer: replied 1 year ago.
he is declaring a gain of 40000 and his accountant has found the way to reduce his CGT to £1900 through claiming that this was his main residence for a number of years which is a lie. He has also claimed the last three years lettings relief
Expert:  bigduckontax replied 1 year ago.
Possible, if the rental was high enough the Lettings Relief could substantially reduce the gain.
Customer: replied 1 year ago.
His solicitor emailed my solicitor to say my brother was prepared to offer her information on the condition that I would not see any of it because there was 'friction' between us! This was so that I could not contradict his dates. I know that lettings relief is available but can he claim for this AND Principal Private Residence? He is, I repeat, lying. He did not live at the house after our mother died
Expert:  bigduckontax replied 1 year ago.
Then report his antics to HMRC.
Customer: replied 1 year ago.
But my solicitor says I might be responsible because the house was in my name. She keeps saying that it is not in my interest to 'stir up the Revenue'. I have instructed her not to pay him until he has complied with the terms of the settlement agreement. If he has 'paid' his CGT liability then she would argue that he has although it was all supposed to go through her.
Expert:  bigduckontax replied 1 year ago.
If the house was in your name you are responsible.
Customer: replied 1 year ago.
Even though all the tenants identified him as the landlord in writing and only he and my sister could put me in and take money out of the household accounts?
Customer: replied 1 year ago.
that should read 'put money in'. I had no access to the rentals money at any time
Expert:  bigduckontax replied 1 year ago.
If you are the one named in the title dees then you will have the CGT liability on disposal.
Customer: replied 1 year ago.
there was a declaration of trust which gave us each a third share of the property. My CGT was 0 because I DID live at the property from 1994 - 2002. My sisters was £13,000. My brothers should have been the same as my sister. This is the problem because he is not telling the truth about PPR nor complying with the Settlement Agreement. Is this about tax or does it require a solicitor's opinion please?
Expert:  bigduckontax replied 1 year ago.
Just report it to HMRC.
Customer: replied 1 year ago.
If the house was put in my name in 2008 am I responsible for the failure of my brother and sister to declare any tax liability on the rental income since 2000?
Customer: replied 1 year ago.
my brother carried on collecting rent until December 2010
Customer: replied 1 year ago.
the house was empty until 2012 when it was sold
Expert:  bigduckontax replied 1 year ago.
No, you are responsible.
Customer: replied 1 year ago.
So your advice to report my brother's antics to HMRC will actually get me into trouble?
Expert:  bigduckontax replied 1 year ago.
This whole matter is likely to get everyone involved into trouble.
Customer: replied 1 year ago.
OK.
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance.
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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