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I don't know if anyone can help with this.In year 2000 my Mother died she had a quater share in the home place her share amounted to 25 acres.(total land 100 acres) Following her death my Brother and Father approached are solicitor with the view that house and land should have separate deeds (House and land were all one deed).This was never discussed with myself or my wife and when I asked my Father what was going to be done he wouldn't tell me.My Brother did but in a round about fashion.The current situation is house seperate deed in my name and my brothers name.Land seperate deed in my name and my Brothers name.My Fathers name and my Mothers name were both removed from the deeds.Following the removal of my Fathers name we have now become liable for income tax,total amount every year £1,400 this is following land letting which is paid end of every October.The house has been unoccupied for last two yrs and has been broken into on numerious occasions (burgler alarm had to be installed).My father who is 90 now lives with me.I now wish to sale my share of the property because I feel that the current situation is only going to get worse ie the house is going to fall into a state of disrepair.I have discussed this with my Brother and feel that we should try and resolve this matter once and for all.He was of the opinion that I wanted the house and after I mentioned putting it up for sale his first reply was we would have to pay 40% of the sale to the inland revenue.He has suggested that who ever takes the house then one or the other forgo a percentage of his share of the land.(the land is restricted to developent so therefore no planing permission would be granted) Total for land letting every yr £5,810.How can I force my Brother and his wife to discuss this with myself and my wife.Forgot to mention if anything happens to me then my share goes to my wife,same position with my Brother.
You seem to be annoyed that a valuable asset was placed in your hands!
I imagine the object of the exercise was to save inhertance tax.
It is not true that you will pay 40% tax on the sale price. The tax is only payable on the gain in value since you acquired the asset. The rate you pay depends on your personal circumstances and various forms of relief may be available and so on and so forth. What you need to accept is that some form of tax is going to be payable when the property is eventually disposed of. You need to have a word with an accountant. It is though important not to let tax considerations weigh too heavily when making investment decisions.
Clearly keeping a property empty and allowing it to deteriorate is not a sensible investment policy. You and your brother need to look into whether you should improve it or sell it. A surveyor can advise.
You cannot really force your brother to discuss the matter and you only want to go to court to make him sell as a last resort.
I am not annoyed that a valuable assest was placed in my hands in fact the complete opposite.What does annoy me is the fact that no consideration or thought was put into changing the ownership.It wasn't discussed by the parties concerned my argument is, the problem of the house should have been solved at the time the ownership came into my hands and my Brothers meaning agreement could have been reached at that time. The money from the land letting goes into my Fathers account in his own bank dispite the fact myself and Brother are the sole owners.At present he is 90 and is of the opinion that this matter should be solved ! Your correct in saying the object of the exercise was to avoid inhertance tax.Both of us were advised by are accountant that we would be liable for tax.In the end my brother finished up paying more than me because he refused to do anything about it for five yrs so therefore received a bigger bill than me.what he failed to understand was the money from the land letting was unearned income,this was also explaned by the accountant.Could I have my share of the property signed over to my wife who is earning less than me or would this complicate matters further.
Your third point makes interesting reading,are accountant was adament that because the land was joint owned then we would be liable for income tax.At the time I questioned this and made the point that the money received from the land went into my Fathers bank account,when we receive the tax bill from HMRC via the accountant we have to take the funds from Dads bank account.To be honest I don't fully understand.Total amount payable each year is £740 each and is worked out on are earnings from are own jobs.The accountant states that the amount earned from the land is classed as unearned income even though we don't receive any income from the land. Should I contact HMRC and explain the situation to them.
Land and house
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Originally Posted by Bigdess
