Our client (85 years old) is in the process of selling some land with a substantial value to a large and well known house builder. Her nephew has assisted her with the negotiations for the ‘Option Agreement’ over the past 21 months. Our client and the nephew agreed payment of 10% of the net price will be payable on completion to the nephew in recognition of his efforts. This 10% is estimated to be approx. £300K.
Our client’s IFA has suggested this be regarded as a fee and could therefore be a liability re IHT should she die before the matter completes. The agreement between our client and nephew also includes that should the nephew die before our client, this sum passes to his children.
My thoughts are that HMRC would be unlikely to accept this as a liability.
Myself and a colleague have previously advised our client she may wish to amend her Will in recognition of the matter. Despite her age, there is also the option a PET.
I should add, there are no concerns re: undue influence or capacity.