I have a bit of a strange story which myself and my three brothers could do with some help please. Our father died some 15 years ago and his handwritten will stated that his four sons would inherit the house to be split equally between us. Our mother was still alive and the will stated she could continue to live there until her death.Three of the four sons live in Ireland and the other brother lives in America.My father wrote his will when he was 50, wanting to ensure that if he died before his wife, his children would inherit the house and not any future husband. He died when he was 95. Our mother was 88 and was never at this stage going to have another husband! She died six years ago and this is where the help is needed.One of my brothers has lived in the family home caring for the parents for 30+ years and the six years since our mother died. He has never owned a property and is over 70 years old. Last year due to mobility issues, he had to move into sheltered housing.He was a bit of a hoarder and it has taken two of us nearly a year to clear the house and get it ready to sell.None of us wanted to sell the house until now as our eldest brother would have had nowhere else to live.He has said he will get his inheritance tax free as he had lived there before and after their deaths. If this is the case, he will be fine but where does that leave the remaining three brothers?The house was valued at €1 million when our mother died and the property tax was paid on that valuation.However an estate agent has since mentioned we may be able to build some houses in the back garden subject to planning permission and this has increased the valuation to at least €1.5 million now.The previous limit for tax free inheritance would have been €350,000 each so the previous valuation would have been fine for us. So does the old €350,000 limit apply or do we get the new increased limit of €400,000 now?What taxes/fines (if any) should we expect to receive from Revenue for the late sale?EKIrish families have a glorious attachment to the informal, and a touching confidence that everything will ultimately work out. Sometimes it can but other times...In this case, there are a number of quite distinct and fairly complex issues wrapped up in your one letter. And I can certainly see why you and your brothers are looking for some guidance. I always assume people read the disclaimer at the bottom of this column but it is important to stress that the advice given is never designed to replace professional advice.On occasion, issues are clear and professional guidance is not required. But “right of residence”, which is the main thread of your query is not one of them. Its impact – financial and otherwise – on the beneficiaries of a will and on the person benefiting from the right of residence can vary depending on the nature of that right.And working out what taxes are due, and when, can be an issue that proves beyond many.The first issue is that there are two different types of right of residence – an exclusive right of residence and a right of residence. These are legal concepts which are rarely given to short descriptions but, in simple terms, a right of residence is a right to live in a property for a period of time even though ownership of the property has passed to someone else. An exclusive right of residence means no other person that the one with the right of residence has the right to occupy the property during the right of residence – including the owners.Rights of residence are not unusual in Ireland, especially where family farms are concerned. It is quite common where a farm has passed down through generations that the family home be left to whomever is going to succeed on the farm but with a right of residence for a surviving spouse for the rest of their life.For reasons of space and complication, I am going to assume that your mum had an ordinary right of residence as you say your brother has lived in the same house both before and after the right was granted in your father’s will. But, for certainty – not least given the apparently informal nature of your father’s will to which we will return – you really do need to get a formal legal confirmation of that.The Revenue Commissioners to whom I spoke regarding the position (without identifying anyone) themselves note: “In the absence of complete information, it is not possible to be definitive as to the particular tax treatment that will apply in the scenario you have described.“These matters can be extremely complex, and each case needs to be considered on its own merits. For this reason, your readers may wish to contact Revenue directly with their specific queries.”But, for now, sticking with our assumption that this is not an exclusive right of residence, this is what it would mean for you.When you inherited your family home, even though you did not have exclusive access to it – i.e. for instance, you could not sell it as your mum had right of residence – your inheritance tax liability at that time was worked out based on the market value of the property minus the lifetime value of the right of residence.To further complicate things, there are two ways of determining the value of a right of residence.First, where you have all the relevant numbers – and assuming it benefits you more than the alternative – you divide the annual value of the right of residence by the annual rent you could get on the property and then multiply that figure by the market value of the property.Confused? Everyone tends to be. And quite frankly, no one in Revenue or anywhere else has ever been able to explain clearly to me how that “annual value of the right of residence” is determined. And many people would have no idea of the rentable value of the home.Fortunately then, Revenue says it will accept a standard figure of 10 per cent of the property’s value as the value of the right of residence. If the right of residence also includes that person enjoying financial support and maintenance, the figure rises to 20 per cent.You give the value of the property when your mum died but the key to valuing the right of residence is its value at the time your dad died. If it was not done at the time, you will need to get it sorted with a property valuer.For now, let’s assume the property was worth €750,000 back in 2011 when your dad died. The 10 per cent value of the right of residence would be €75,000.The importance of this figure is that it determines any liability you and your brothers had at that time.Deducting the €75,000 value of the right of your mum’s residence from the €750,000 figure we are using for its value at that time leaves a balance of €675,000. So that was the value of the inheritance to you and your brothers back when your father died. As there were four of you, each “received” an inheritance of €168,750.You need to put that together with anything else you might have inherited from your father in that will. Assuming he died before December 7th and the individual total of your inheritance was less that €332,084, no tax liability arose at that point and assuming the total you inherited from your dad was under €265,667 – less than 80 per cent of the threshold at the time – you did not need to inform Revenue.After December 6th of that year, the tax free threshold for inheritances from parent to child fell to €250,000. I cannot speak for your brother based in the States but the rules over there tend to be more generous on inheritance.Rolling forward to your mum’s death six years ago, you now have to reassess her right of residence using the same 10 per cent formula – giving a right of residence value of €100,000.This is value of the balance of the family home that you and your brothers are deemed to have inherited on her death. Divided four ways, it adds €25,000 to the amount inherited from your dad, bringing the figure for each of you in respect of the family home to €193,750.That is still below the category A tax threshold governing inheritances from parents to children – which by 2019 or 2020 when your mum died would have risen to €335,000 as you say. Of course, you will also need to take account of anything else inherited from her or from your dad.The person who enjoys the right of residence can also have a tax liability of the benefit they receive. This is determined by multiplying the value of the right of residence by a figure determined by their gender and age – a table can be found in Schedule 1 of the Capital Acquisitions Tax Consolidation Act 2003, scrolling down to Table A. However, as anything your mum inherited from her spouse was tax free, it does not apply in this case.If it had been an aunt, for instance, at 75, the multiple would have been 0.1730, given a benefit of €12,975.Selling the home Moving on, you did not want to sell the property while your brother was there but he has now moved out. So what is it worth and what does that mean for you?The first thing is that it means nothing in relation to inheritance. That figure was settled at the €1 million valuation when your mum died. What is now relevant is potential capital gains tax liability on any increase in value of the property between when your mum died and when you sell it.Whatever price you sell the home for – whether for family use or as a potential development site – the tax treatment is the same. Once selling costs are deducted, the gain is divided between the four of you. Leaving the brother in care out of it for a minute, each of the other three pays no tax on the first €1,270 of any gain. Beyond that, you pay 33 per cent tax on any further gain.Your brother in care appears to be claiming dwelling house relief as this was his only home and he lived there both before and since he inherited a share in the property. As that makes this his principal private residence, he would be exempt from capital gains tax as long as the property is sold for current use - i.e. as a family home. However, if there is a premium in the sale price for its development potential, he would have a CGT liability on that added value.If the property is now worth €1.5 million, as you have been advised, the capital gain is €500,000. Assuming €20,000 of expenses on estate agent and legal fees and the like, that leaves you with a gain of €480,000.Divided four ways, this is €120,000 per brother. Stripping out the €1,270 tax free allowance, each of you will have a €118,730 gain. At 33 per cent, three of you will be liable for €39,181 in capital gains tax, leaving you with just shy of €336,000 each on a sale of the home at that price.You mention taxes or fines from Revenue on the late sale of the property.As explained above, there is no late sale. The inheritance was settled when your mum died. This sale is an entirely separate and valid sale by you four of a jointly-owned asset and has nothing to do with inheritance tax.However, if you did not make any filings to Revenue back when your mum died and you decided to leave your brother living in the home, you could face some interest charges on any tax due from that time – which, of course, will depend on the total amount inherited from both parents and whether that does or does not exceed the thresholds in place at the time.One final concern. You refer to your father’s handwritten will. This raised a separate alarm in my head. There is no prohibition on handwritten wills but such wills generally are drawn up without legal advice and can leave everyone exposed to all sorts of legal challenge. There is also the separate issue of something called legal right share. You don’t say whether your mum was left anything by her husband outside of this right of residence but, as there were children, she would have been due two-thirds of the value of his estate. I suspect she got nothing of the sort.Neither of these concerns are relevant here as there is a time limit on claiming legal right share (maximum one year) and anyone challenging the validity of a will executed 15 years ago is well nigh impossible. But others in similar situations should beware of the risks in such an approach to drawing up a will.For you, the bottom line is that inheriting this house itself does not present inheritance tax issues - though you might have liability depending on any other inheritance from your parents, especially if you have not filed returns (Form IT38) with Revenue after your mum’s death. You will certainly have capital gains tax liability on any sale of the home for anything above its €1 million valuation at the time of your mum’s death.Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice