Any accountants about? Property & tax question.

[awopbopaloobopawopbamboom]

Looking for advice, spoken to 2 different accountants and an FA and have had 3 different / conflicting pieces of advice.....

I'm trying to be as simplistic as I can but am happy to answer questions.

A relative has received a lump sum following the sale of a building. They did not own the building but were a legal beneficiary of the sale.

The capital gains tax has been paid on the full sale price of the building at 20%.

They do not work and receive state pension.

The sum is in the region of £80k.

Do they need to pay HMRC any more tax? For fuller context, except from their state pension, this is all the money they have.

So far the advice they have received is 1) no, all tax is paid. 2) yes, at 40% because it's "higher earnings" (even though it's not earnings and is a one off sum) and 3) yes, at 10% due to the amount received.

They could do a self assessment and let HMRC decide?

Is this a residential building?

Who has paid the capital gains tax? A trust?

If it was a trust that sold the property and they have then made a distribution to this person, what kind of trust?

Capital gains tax is paid on the proceeds less cost. Who calculated and paid whatever CGT was already paid?

Trying to simplify a complex tax/trusts scenario and asking random internet strangers is unlikely to get the right answer. As soon as you over simplify you end up with the wrong advice.

You can't just chuck it on a self assessment return if you're not even clear what you're reporting. It's a self assessment, you are the one doing the assessment not HMRC. If it's wrong there are penalties.

Depending on the specific scenario you need advice from a chartered tax adviser or STEP practitioner.

It wasn't a residential building. CGT has been determined and paid by the solicitors & accountants appointed to manage the sale etc.

Chartered tax advisor says no more money to be paid but relative believes that is too good to be true.

You didn't answer how they were entitled to the proceeds if they didn't own it. Was the property sold by an estate? A trust? What?

@Logistria sorry, yes, sold in trust.

From what I understand the tax that has been paid is corporation tax, not capital gains tax. Sorry for not being down with the lingo, trying to help an elderly relative out!

Corporation tax? That doesn't make sense. Trusts don't pay corporation tax and that's not even the CT rate unless you're talking about an OEIC or something? 20% is the trust capital gains tax rate on non-residential property.

With the greatest respect, this is an extremely complex area and the lingo is critical here. Perhaps if the wrong questions have been asked - or asked of the wrong people - that is why conflicting advice has been received.

I was going to say before your corporation tax comment, that if this is a capital distribution from a discretionary trust then there is no further tax in the beneficiary's hands and the advice you attribute to the CTA would therefore be correct. If it was an income distribution they would have received a form R185 and a 45% tax credit.

However this is a very complex area and they should pay for specialist advice.

Bearing in mind that you haven't been able to clearly or accurately set out the facts, anybody posting here is effectively guessing at what scenario you are trying to describe.

@Logistria thank you and I'm not deliberately trying to be frustrating. I can lay out some facts as I know them, appreciate your time and we are trying really hard to seek more specialist advice but after paying 3 people for 3 consultations we are a bit at our wits end.

• building was a type of members club "owned" by the trustees of the club
• club was dissolved and assets distributed
• each trustee received the same financial amount of settlement
• the comms I've seen from the solicitors say "corporation tax of 19% and 25% has been paid". The total corporation tax paid is 20% of the sale price.

Each beneficiary will have a different financial situation, I know. My relative has no other savings or income so this £80 odd k they have is all they have.

As I said, we have paid specialists and also sought advice in general but have had no actual outcome, other than what I've mentioned above. Happy to go back to a 4th advisor but at this point it's just becoming too much of a minefield.

No extra tax to pay. CGT was already deducted when the sale completed. You can see that in the final statements received from the solicitors.

My understanding is that all tax has been paid, and the individuals are not liable to pay any tax personally. But I've read so much and talked to so many people it's all confusing me, and I'm young and relatively with it!

Ring up HMRC and explain the situation or post a question on their forum. They are usually very helpful. The link is to the self assessment part of the forum. I would probably ring and make a note of date time and who you talked to so you can reference the advice.
https://community.hmrc.gov.uk/customerforums/sa