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The tax consequences of a promise to gift part of property sale proceeds.
Some years ago a new client agreed that if his cousin sold a plot of land in the next 100 years the client would receive 50% of the sale proceeds after taking into account legal and professional fees the agricultural value of the land and any capital gains tax payable by the cousin. The cousin can retain an amount equivalent to the inheritance tax that would be payable if he were to die within seven years but this would be released to my client with the addition of interest after that period.
My client did not take specific tax advice from his accountant or solicitor at the time. I am not sure whether his cousin took any advice from his accountant.
My client believes that the agreement gives him a beneficial interest in the land and that his cousin made a potentially exempt transfer to him....
