Capital Gains On Inherited Investment

u2nick79

Hello there,

Back in 1997 my great grandma died and left about £45k to my dad. I was 18 at the time. He bought a house and put it in my name to avoid tax on himself.

The house needed work and it has been worked upon on and off over the years. Now the years have passed and I bought a house with my fiance last year and we live together. The house my dad bought in my name has never been lived in.

We want to sell this house, is there anyway we can avoid capital gains tax on the property?

This is all new to us and we are disheartened that we will lose part of the investment in tax that my great grandma worked so hard to achieve.

Please help.

Regards,

Nicola

seraphin_2

If I understand this right if the house was in your name for all these years, I think you can sell it without paying inheritance tax, the problem is that because youve never lived in it the tax office will see it as an investment for making money, the way to get round this I beleive is to register yourself living in the house, paying gas,elec etc for six months before you sell it. I would check with a solicitor however to clarify this.

pchelpman

Few more thoughts here.

Firstly, as there may be quite a bit of money involved here you should go pay for some proper professional tax advice. I suggest from a CTA. The tax specialists. Website here ....

http://www.tax.org.uk/

If you do as seraphion suggests you must make sure you really do live in the house. Remember it's quality of occupation that counts not length in occupation.

If you are successful in this then the last 3 years of ownership are completely disregarded for CGT purposes. In other words those final 3 years escape a CGT charge.

Also you then have the oppportunity to make an "election" as to which of two properties is to be totally exempt from CGT.

The interaction of these, and other, CGT rules means the whole situation is complex and must be treated carefully, hence my suggestion you get formal advice.