CGT or IHT?
Q. I own a house which is let. I intend to give it to my son. I understand that it will not be clear of inheritance tax for seven years, but I would like to know what is the capital gains tax liability for me now, and also what it would be for my son in seven years’ time?
A. You should take detailed advice on this quickly, since capital gains tax is due to change drastically on April 5th next year when a new flat rate of 18% is introduced. Whether you will be a winner or a loser under the new scheme depends on whether you are a higher rate or basic rate taxpayer and how long you have owned the property for. If you are a higher rate taxpayer you could currently be called on to pay CGT at between 24% and 40% of your property’s increase in value. If you are a basic rate taxpayer on the other hand, you could pay as little as 12% on your profit if you have owned the property 10 years. So you can see it’s important to find out where you stand. You’re obviously trying to weigh up CGT as against IHT. This is a common situation. See a solicitor specialising in financial planning.

Contract to avoid
Q. We’re concerned that estate agents are including a clause in their contracts that says they get paid if they find a “ready, willing and able” purchaser – even if the house isn’t sold. I don’t think this is properly explained to clients.
A. Unfortunately this clause is not illegal currently. Anyone engaging an estate agent should check the contract very carefully before signing it. Avoid anything giving the agent sole selling rights (as opposed to sole agency) if possible. This would allow the estate agent to claim commission even if you found a buyer for your property. And steer well clear of the “ready, willing and able” clause. This means that the agent can claim a commission once a buyer has been found who is in a position to enter into an immediate agreement. Something may crop up forcing you to withdraw from the sale, but with such a contract there’s no going back.

Backdated ground rent
Q. I bought a house four years ago, but a few weeks after completion I received a bill for £600 for ground rent including unpaid insurance premiums. This came from the agents for the freeholder. They were very unhelpful, but my solicitors promised to look into this for me. If the previous owner didn’t pay these sums, should the debt be transferred to me? How much can they ask me to pay?
A. Your solicitors should have checked that ground rent and fees payable under your lease were up to date. If they failed to do this you should suggest that they compensate you by paying the fees, since they do become the responsibility of the subsequent owner. You should sort this out, since the freeholder could eventually take proceedings to repossess your house. Write to the person at the solicitors who is responsible for dealing with complaints. You are now entitled to take out your own insurance on the property instead of paying your freeholder’s inflated premiums. Ask a solicitor how to go about notifying them in the prescribed form.

Reluctance to share
Q. The house next door has just been sold. We have shared access over the driveway, but my new neighbour says I am driving on his property and wants to take part of my garden and move the gates so that they’re in line with his house. I have got the deeds from the Land Registry, but what would I do if he started doing work without my agreement?
A. Shared access can often present a problem. If your neighbour won’t see sense the best thing you can do is to show that you mean business from the outset. Get your solicitor to write to your neighbour pointing out the legal situation. The letter should suggest that your neighbour takes his own legal advice. Assuming he does this and is prepared to accept the legal realities that should be the end of the problem. If he fails to take advice and continues with his proposals a stronger letter will be required warning him that any alterations to the current arrangement will result in a court injunction with associated legal costs, for which he will be responsible.

Disappearing view
Q. I used to be able to see the hills from my bedroom window, but now all I see is my neighbour’s large conifer tree. I have heard his wife complain about it, but she has now left him! The tree doesn’t affect the light I receive at all, so does this mean I can’t ask him to cut it down substantially?
A. You can ask him, but you won’t be able to force him. You are entitled to cut back any branches that come over on to your property, but you have no right to a view. If there were two evergreen trees together however they would constitute a hedge, and (depending on their height and the distance from your house) it’s possible that you could ask the council to intervene. The council has leaflets explaining the heights and distances involved.