Capital Gains Tax Help

MISHEL02

Hello

I need a bit of advice my mother transferred her house over to myself and my sister 5 years ago (was worth about £140,000). She was living there rent free until she moved out 18 months ago and the house has been standing empty since. I cannot really afford to be paying the council tax and its quite far from where I live.

House has been valued recently at £125,000 and sales costs of £3,000. I have also spent around £2,000 tidying it up as it has been empty.

Approx how much CGT will I have to pay if we decide to sell it? I have not used any of my 08/09 entitlement

Thanks so much

The calculations are just so complex

CLAPTON

You pay CGT on the gain in value of the property, less costs, less your CGT allowances, at 18%

In this case the profit may well be zero.

However, you will need to establish the value when you were given the property... even if the open market value was 140,000 clearly the actual value at that time would have been much less as it had a sitting tenant (i.e. your mother)

Assuming you both own half the house then you both have CGT allowance of 9,600

John_Pierpoint

If the house is a fairly standard one in a standard sort of street, you could start by using one of the sites with access to the Land Registry "real" sale prices, to get a feel for open market prices at the year of your acquisition. (eg Zoopla)

I would have thought that any devaluation of the value of the property since would depend on your mother's rights of occupation.

When push comes to shove, you will be up against the district valuer and may well need to pay for professional advice to fight your corner.

Have fun

MISHEL02

Thank you for your advice, how does it work? Does my solicitor pay the CGT once he gets the monies or do I need to inform the Inland Revenue and fillin a tax return?

fengirl_2

You self assess and declare the gain yourself.

John_Pierpoint

Even though you may think you have made a loss, you still have to keep the tax system busy by telling them and allowing them to decide if they agree with you.
I once had to spend all day going boss eyed in the local library dredging up information on old microfiche to complete a return when it was blindingly obvious I did not owe any CGT as the transaction was exempt.

MISHEL02

thanks for the advice