CGT on Second Home

Paul_Varjak

My sister is buying a second property (circa £100,000) that she intends to to renovate (circa £30,000) and re-sell after about on year.

In order to avoid CGT, my sister has registered the property in her daughter's name. The chances are that her daughter will never live there, nor will anyone else (let alone my sister) before it is sold.

What are the implications for my sister for this 'tax evasion'?

johnllew

Sounds to me like this is property development, liable to income tax rather than capital gains tax.

samraj

How to calculate CGT if you don't know the value of property inherited in 1998, sold in 2004? Sorry for hijacking this thread!

Jettycat

samraj wrote:

How to calculate CGT if you don't know the value of property inherited in 1998, sold in 2004? Sorry for hijacking this thread!

You either estimate the value in 1998, or get an historic professional valuation done for 1998, or have a look at the probate done in 1998 and see what value was attributed to the property then.

In any case you will need to advise the Inland Revenue where your value has come from so they can decide if they want to disagree!

samraj

Thanks for that, I presumed if it was valued in the probate there would be no questions asked. I have just located a page on nationwide which has indexed historical house prices all types across the country, which I'll quote.