Capital Gains Tax on (old) House sale

cleanerboy30

Anybody help with this one?

My mother inherited a house in her father's will in 1977 but the lady living in the house was given a lifetime interest in the property. The lady has recently died and I am helping mum to sell the house but have no idea what her liability for CGT is?

The property is in poor condition but guess would be worth about £120,000 in today's market and when my grandfather died and the property left to my mother again I would guess it was valued at about £10,000 as part of the estate and all taxes due then were paid.

I am sure that there is a tax liabilty but how is it assessed in this situation?

Regards

frivolous_fay

I've been trying to swot up on CGT recently. I'm a complete amateur so apologies if any of the below is inaccurate... I sort of botched it together from a government site... I can't find the page I was referring to but this one may help. http://www.hmrc.gov.uk/leaflets/cgt1.htm

As far as I can tell:

CGT basic rate is 40%
For each year that the property is inhabited you get 5% tax relief
You also get a certain allowance in profit that you make in a year which isn't liable to be taxed. (£6,000 odd or something.. might be more)

I have no idea if it's really this clear cut, but the above would suggest that if the house had been inhabited for 8 years or more, you'd be in the clear?

Take this with a pinch of salt until advised by someone with a better understanding of tax! ;-)

cleanerboy30

thaks for that fay

trouble is that I think the house has to be inhabited by the seller ( i.e. my mum) for 8 years for the CGT allowance to apply - not just lived in by anybody but will look at hmrc leaflet suggested