Selling a self build barn conversion

Riccardo6

Hello all,
Complicated problem. I'll try to keep it simple.
Main house and old barn owned by parents. Barn conversion started. One parent dies. Barn completed. Daughter on deeds of barn and has a small mortgage on it. Capital gains on the profit of the sale????? And what about the transfer of the barn to the daughter?????
All rather confusing, would appreciate any help you can give, minds working overtime and getting no where .

Much thanks.

G_M

Is the daughter the sole owner or is it jointly registered with surviving Parent?
If so is parent on mortgage?
Did the daughter inherit? When?

What was value at time daughter (inherited? was gifted? bought?) the barn?
What was spent on it?
What is value now?

See here for CGT rules.

Riccardo6

Sorry I missed your reply, I'm new here!
Daughter is the sole owner and only name on mortgage.
Property has to be gifted as not inherited or bought.
Value at acquisition was 400k. 250k spent on it, value now 450-500k

tyllwyd

The barn was worth £400K when gifted - was the £250K spent before or after the gift? Who paid that money, the parents or daughter? When was the barn given to the daughter? Has she ever lived in it as her primary residence?

Riccardo6

Yes it was valued when gifted at 400k, the 250k was spent before by the parents and after the gift which includes family labour cost(mine!!!) that is yet to be paid from the sale.The daughter borrowed 45k mainly for second fix, ie bathrooms etc. Barn was given in an uninhabitable state and is only just about to be designated her primary residence. Up till then she has lived in the family home

tyllwyd

This is what I am thinking (completely unqualified to give advice, so please don't assume I'm right - you need proper advice from an accountant before you do anything more!)

Your sister was given a barn worth £400, which I think your parents had spent £250 doing up (I don't quite understand what you've posted) - did your parents pay capital gains tax at that point? If not, I think you need to do some research to find out if they should have done.

Your sister then spent another £45K on it, and also your labour (I'd have thought you need to give her a proper invoice if you need that cost to be taken into account), and the barn is now worth £450 - £500K.

If that's right, it doesn't look as if she's made much (any?) profit since it was gifted to her. She has an annual CGT allowance of approx £10K, so if you are lucky that might cover it.

Does that look like a fair summary of the situation?