Unhelpful Solicitor

cazk

To make a long story short, my 2 siblings and I were left a house by our parents when they both passed away within the last 7 years. The house has been on the market for the past 4 years and we have recently gone to sale agreed (finally)

My solicitor contacted me this morning about the sale and asked had I been paying NPPR tax to which I replied no. We had a similar discussion in April of this year and this was the first I had heard of NPPR tax. He proceeded to tell me that I was liable for this tax back to 2009 for an amount in the region of €2600. I had never heard of this tax. Maybe that's ignorance on my part but since I will be paying the man approx. €10,000 for all his work since my parents first made their will, I would have expected him to advise me on such a tax before I was 4 years in arrears. Is this just my opinion or is advising me not part of his job??

He is insisting that he will pay the tax from the proceeds of the sale but I am of the opinion that if this tax is paid by self declaration then can I not take him out the equation and take my chances? His reasoning is that the purchaser of the house will want the tax paid before they sign contracts on the house. What has this got to do with the purchaser?

I don't have a law degree so I hoping someone with a better knowledge of this kind of thing can advise me. TIA

dats_right

OP, you are asking your solicitor to defraud the Revenue. Your solicitor will not agree to this and I think saying that your solicitor refusing to commit a fraud on your behalf is 'unhelpful' is daft.

Anyway, the NPPR charge is a legal charge on the title of a property for 12 years, meaning that the purchasers would be liable to pay the tax unless discharged by you. The purchasers will be on notice of the fact that the property is liable for the NPPR charge by virtue of the date on the Grant of Probate of the surviving spouse, so 'taking your chances' as you put it is simply not an option here.

It is not generally a solicitor's job to advise clients everytime tax rules change. It is the responsibility of individuals to keep themselves informed of their tax obligations and to discharge same in a timely manner.

Can I ask when did the Grant of Probate issue?

cazk

Not exactly sure of the month but it was late 2009.
I didn't realise that the charge is on the title of the property for 12 years, so that clears up the purchasers involvement.

I still think that if I am paying such a large amount of money then advice should be supplied. After all If I knew all the answers myself then I wouldn't have to use his services at all. (That isn't meant to sound sarcastic) If I walked into a solicitors office tomorrow and told him I was going to buy a second property for investment reasons I would expect to be told all the things I would be liable for such as NPPR, stamp duty etc. Is that not why we have them in the first place?

Milk & Honey

cazk wrote: »

Not exactly sure of the month but it was late 2009.
I didn't realise that the charge is on the title of the property for 12 years, so that clears up the purchasers involvement.

I still think that if I am paying such a large amount of money then advice should be supplied. After all If I knew all the answers myself then I wouldn't have to use his services at all. (That isn't meant to sound sarcastic) If I walked into a solicitors office tomorrow and told him I was going to buy a second property for investment reasons I would expect to be told all the things I would be liable for such as NPPR, stamp duty etc. Is that not why we have them in the first place?

No. A solicitor is hired to do a specific job, which is get you a clear title to the property. He is not a business mentor. Very few solicitors hold themselves out as having expertise in tax or investment.

jasonpat

dats_right wrote: »

OP, you are asking your solicitor to defraud the Revenue. Your solicitor will not agree to this and I think saying that your solicitor refusing to commit a fraud on your behalf is 'unhelpful' is daft.

Anyway, the NPPR charge is a legal charge on the title of a property for 12 years, meaning that the purchasers would be liable to pay the tax unless discharged by you. The purchasers will be on notice of the fact that the property is liable for the NPPR charge by virtue of the date on the Grant of Probate of the surviving spouse, so 'taking your chances' as you put it is simply not an option here.

It is not generally a solicitor's job to advise clients everytime tax rules change. It is the responsibility of individuals to keep themselves informed of their tax obligations and to discharge same in a timely manner.

Can I ask when did the Grant of Probate issue?

I think it is a good choice to defraud the value by solicitor because they are good at it.

Peregrinus

Milk & Honey wrote: »

No. A solicitor is hired to do a specific job, which is get you a clear title to the property. He is not a business mentor. Very few solicitors hold themselves out as having expertise in tax or investment.

I'm inclined to disagree in this instance. If an estate includes residential property, come 31 March the estate is going to be liable for NPPR on the property, and this is probably something that a competent solicitor should point out to the executor. Solicitors are expected to be competent to advise in the basics of managing a deceased estate, and this is a tax liablity which is going to arise fairly often. Furthermore anyone engaged in conveyancing practice is going to have an awareness of this tax, and the implications of not having paid it when it comes to the sale of a house. To be honest, I think the solicitor has slipped up here in a way that, really, he shouldn't have.

In this case the tax liability is only €800; the rest of the €2,600 is made up of penalties for late payment, so the fact that the executor wasn't advised of it has made quite an impact.

I'd complain to the solicitor. At the very least I'd hope to get a discount on the bill reflecting at least part of the cost of the penalties.

Milk & Honey

Peregrinus wrote: »

I'm inclined to disagree in this instance. If an estate includes residential property, come 31 March the estate is going to be liable for NPPR on the property, and this is probably something that a competent solicitor should point out to the executor. Solicitors are expected to be competent to advise in the basics of managing a deceased estate, and this is a tax liablity which is going to arise fairly often. Furthermore anyone engaged in conveyancing practice is going to have an awareness of this tax, and the implications of not having paid it when it comes to the sale of a house. To be honest, I think the solicitor has slipped up here in a way that, really, he shouldn't have.

In this case the tax liability is only €800; the rest of the €2,600 is made up of penalties for late payment, so the fact that the executor wasn't advised of it has made quite an impact.

I'd complain to the solicitor. At the very least I'd hope to get a discount on the bill reflecting at least part of the cost of the penalties.

The question I was addressing was about the role of a solicitor when a client states he is purchasing investment property. In any event there is not enough information to criticise the solicitor in this case.The house has been on the market for four years. It has not been stated as to when the solicitor got involved other than when the house went for sale, nor has it been stated that he was asked to advise the executor regarding the affairs of the estate.

Peregrinus

Fair point.

The OP does say that cazk will be paying the solicitor "approx. €10,000 for all his work since my parents first made their will", which suggest to me that he drew up the will, acted for the executor in taking out the grant of probate, and has continued to act for the executor, including in the sale of the house.

My comments were based on that assumption, which perhaps I shouldn't have made. If the solicitor's first interaction was when he was instructed in relation to the sale of the house, then that's a different story.

cazk

Thanks for all the input.

It looks like Im just gonna have to stump up and face the wrath of my siblings

Just to clarify, the solicitor was first involved when my parents made their will IN 2004. Little did we know that both would pass away with 3 years of that will being made.
If anyone does have a working knowledge of NPPR could they help me do the sums. If its €200 per year x 4 is €800 and €20 per month x 48 is €960 late fee that amounts to €1760. I also read somewhere else that its €20 per named owner (3) so its €60x 48 is €2880 plus the €800 for 4 years amounts to €3680. But the solicitor is telling me somewhere in the region or €2600

CONFUSED.COM

Grolschevik

cazk wrote: »

I also read somewhere else that its €20 per named owner (3)

As far as I'm aware, the executor will be the named owner for the purposes of the charge, not all three beneficiaries.

Peregrinus

The tax for 2009 is overdue for 40 months (July 2009 to October 2012) at 20 euro a month

The tax for 2010 is overdue for 28 months at 20 euro a month

And so forth.

Reloc8

cazk wrote: »

If I walked into a solicitors office tomorrow and told him I was going to buy a second property for investment reasons I would expect to be told all the things I would be liable for such as NPPR, stamp duty etc. Is that not why we have them in the first place?

I wouldn't entirely agree with you - there's a difference between going into the solicitor and asking whether you should make a property investment (the solicitor would quite likely say that's not within their expertise) as opposed to saying that you had decided to make one and wanted the solicitor to act in relation to the conveyance. In the former case you would expect, if the solicitor was willing to provide that advice, to be told of the various liabilities such an investment would attract.

In the latter case the solicitor is not required to explore whether the investment is a wise one having regard to potential liabilities - he or she must simply carry out the conveyancing task for you.

Peregrinus wrote: »

I'm inclined to disagree in this instance. If an estate includes residential property, come 31 March the estate is going to be liable for NPPR on the property, and this is probably something that a competent solicitor should point out to the executor. Solicitors are expected to be competent to advise in the basics of managing a deceased estate, and this is a tax liablity which is going to arise fairly often. Furthermore anyone engaged in conveyancing practice is going to have an awareness of this tax, and the implications of not having paid it when it comes to the sale of a house. To be honest, I think the solicitor has slipped up here in a way that, really, he shouldn't have.

In this case the tax liability is only €800; the rest of the €2,600 is made up of penalties for late payment, so the fact that the executor wasn't advised of it has made quite an impact.

I'd complain to the solicitor. At the very least I'd hope to get a discount on the bill reflecting at least part of the cost of the penalties.

That said, I'd tend to agree with the above post, presuming that you instructed the solicitor to advise you as executor in the administration of the estate, as opposed to simply instructing them to act in relation to the intended sale of the property.

A competent solicitor who is instructed to advise the executor would be expected to know of the liability in question and advise you to pay it as it fell due.

You should have it out with your solicitor, pointing out that you instructed him to advise you as executor and that you were not told at any stage prior to now of the need to pay this tax liability, presuming that is so.

As Peregrinus has also said it might be something which you can reach an accommodation on in respect of the global position on legal fees for the estate.

cazk

Thanks again for the input everyone. There is nothing worse than feeling like a total fool when you walk into a solicitors office and he starts throwing legal jargon at you and your looking out your mouth at him!

Pat Mustard

cazk wrote: »

If anyone does have a working knowledge of NPPR could they help me do the sums. If its €200 per year x 4 is €800 and €20 per month x 48 is €960 late fee that amounts to €1760. I also read somewhere else that its €20 per named owner (3) so its €60x 48 is €2880 plus the €800 for 4 years amounts to €3680. But the solicitor is telling me somewhere in the region or €2600

CONFUSED.COM

Have look at the nppr website, look at FAQ and see the charges and late payment fee section.