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Deed of gift and capital gains
llywelyn111
Posts: 57 Forumite
in Cutting tax
HI there
My gran recently passed away.
In 1994 she did a deed of gift of her house to my sister and myself. The house is roughly valued at 135k ish. Were do we stand with capital gains tax??
Sooo confused with which tax is what lol
regards
David
My gran recently passed away.
In 1994 she did a deed of gift of her house to my sister and myself. The house is roughly valued at 135k ish. Were do we stand with capital gains tax??
Sooo confused with which tax is what lol
regards
David
0
Comments
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llywelyn111 wrote: »HI there
My gran recently passed away.
In 1994 she did a deed of gift of her house to my sister and myself. The house is roughly valued at 135k ish. Were do we stand with capital gains tax??
Sooo confused with which tax is what lol
regards
David
Couple of questions for starters:
Did she continue to live in the house?
If so did she pay you a proper rent?0 -
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I did live in the house for a year while my current house was being built, and left there in September 2008. Would this make any difference??0
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llywelyn111 wrote: »hi there
yes she continued to live there and no rent.
Unfortunately she retained a beneficial interest and as such the value of the proiperty is within her estate fot inheritance tax purposes.
If this was gifted through a solicitor dealing with the documentation, was the reason for the gift disclosed to the solicitor. If so, the solicitor should have advised about the retention of benefit and the only way to avoid that was for payment of full market rent.
If the estate value is below £325,000 no inheritance tax to pay but CGT may be payable at 18% of the gain.
SamI'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.0 -
Presumably once upon a time gran had a husband?.
For inheritance tax purposes her personal representative can claim the unused percentage of her husband's nil rate band.
It can get a bit complicated depending on when he died, but if we pretend he died a few years ago and left everything to gran, who in turn died after autumn 2007, then gran's estate gets a double nil rate band.
For further confusing details and examples you could start here:
http://www.hmrc.gov.uk/cto/iht/trans-nilrate-band.pdf0
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