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Probate & Family issues

5 replies

BryterLayter · 30/04/2017 18:47

We are at the last stages of Probate after my mothers death Intestate last March. Mum sold the family home in December 2015 having been pressured quite heavily by my sister to do so. Whilst I knew the house was up for sale, sis didn't tell me a sale had been agreed & I went over to find it empty with mum moved out Angry (I hadn't been around for a few weeks as my daughter was in hospital for 3 weeks on the south coast). My relationship with sister has been bad since that time. Mum moved to a rental whilst she was finding a permanent move but then passed away in March a day after her 89th birthday.
My sister previously had a building company & over several years she would do stuff in mums home like put in kitchen cupboards that had come from somewhere they were refurbing or if she was paying staff for a full day on a contract but they weren't needed on a job they would sometimes do a bit of work at mums - this was over a number of years, a bit here & there. Mum also paid her for major things like a new Boiler & getting electrics done, these were at normal costs.
We were all grateful that she did this though Sister constantly let us know how amazing she was for doing these things for mum. Mum gave money to sister on a very ad hoc basis over the years & told me she was upset that sis had told her friends how mum owed her for all the stuff she'd done.
There are 4 of us, but with a brother who was more of a hindrance than help & another sister abroad, all support for mum over the years was done between myself & sister.
After the sale of the house (within days) mum told me she had been taken to the bank by sister & her husband and made to sign a document & pay £165,000 to my sister. The document is brief and states the money is in payment for the works done on the house, mum signed it & it was witnessed by a friend of BIL.
We were never rich & the house happened to be in an area that has 'come up' in London, so for the first time in her life mum had a large amount in her bank.
Forward to Probate (sorry this is so long!), we are awaiting HMRC to let us know if they are viewing the 165K as a 'Gift' which then will incur a further 40% tax bill - which sister has not agreed she will pay, so this means that any further possible tax will be shared between all 4 siblings!
Finally - my question is whether there is any way we can either 'force' my sister to take the hit on any further tax payable or claim that she has already had a large percentage of the estate & therefore this should be reflected in the final settlement of the Estate (the Estate was v simple with no other property/shares/etc.)? The initial tax has already been paid to HMRC.
Sorry this has been so long. I'd be really grateful for any advice....

OP posts:
ivykaty44 · 30/04/2017 18:57

Surely legally you can't pay the tax on the £165k as this would then be seen as a gift from you three siblings to your sister and therefore be also taxable....

Did needs to pay her own tax bill for the £165k otherwise you will all end up paying endless tax

prh47bridge · 30/04/2017 22:55

Surely legally you can't pay the tax on the £165k as this would then be seen as a gift from you three siblings to your sister and therefore be also taxable

Gifts are not generally taxable. The issue is that gifts over certain limits made in the 7 years before you die may form part of your estate and be subject to inheritance tax. This would not affect anything the siblings now pay their sister unless they die within 7 years. There is no risk of endless tax. And in any event they wouldn't be paying the tax. It would come out of the estate, reducing the amount to be distributed.

BryterLayter · 01/05/2017 15:32

sorry if I was unclear - the 165k could be seen by the HMRC (who are yet complete their work on the estate)as a 'Gift' from my late mothers' estate therefore the rules about length of time prior to her death (in this case within 3 months) & amount ( anything over £5,000) mean the estate can be given a tax bill in addition to the standard tax payable. As this tax would come out of the total estate to be distributed, it will mean each beneficiarys' share will be diminished.
I am still amazed that the recipient of the gift isn't the one who automatically pays (especially being a beneficiary) but that's the way the law is.

OP posts:
Collaborate · 01/05/2017 17:29

Surely, either it was genuinely money owed, or there is a question mark over whether your sister was exercising undue influence. It sounds as if there was at least some money owed.

Blowingthroughthejasmineinmymi · 02/05/2017 13:57

Is your dsis going to get more than you all then, and you will get say 50 grand and have your share diminished on her gift. Does she get less as well? does she also get money in addition to the 160 I wonder.

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