📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

CGT or other taxes to pay?

Options
Hi am new to this and was wondering if anyone could advise on a situation i have.

In 1994 i inherited a property with a sitting tenant in situ, and she is still in occupation of the property and these is no troubles with her paying the rent etc and i have kept the property in good order. She is now possibly finding it to much as it is a 3 bed bungalow. If she does move out and i was to sell would there be any taxes to pay or could this be avoided say by living in the property myself for a curtain amount of time or something else!! I am a register co owner of another property which is my residence. The property is worth around the 300K mark. Thanks

Comments

  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Standard CGT situation,

    Suprised with nearly 20 years of tax returns you have not looked it up allready

    What was the probate valuation?
  • hi, does that mean there is no way out of it? I was happy to let the rent come in, all be it much under market value! and keep the property up to scratch for the elderly lady.
    Am not sure how much the probate valuation was as was quite young at the time, but am sure was well under having to pay tax on!
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    google HMRC cgt property

    you will need the probate valuation


    http://www.hmrc.gov.uk/cgt/property/reliefs.htm
  • John_Pierpoint
    John_Pierpoint Posts: 8,401 Forumite
    Part of the Furniture 1,000 Posts
    edited 6 February 2013 at 1:03PM
    Frustrating isn't it!
    You have spent nearly 20 years providing subsidised accommodation.
    What sort of fiat currency profit have you managed to report each year, after deducting your expenses of management and maintenance?

    However during that time your "investment" has trebled (?) in value, while the costs of living haves less than doubled. What is more, your tenant may give up the tenancy (you can offer her a bribe or slightly less ethically buy a short lease flat and persuade her that would be a better place to live).
    As soon as you obtain vacant possession the value of the bungalow will increase perhaps 50%. - especially it it has development potential.

    You could give 50% of the land and bungalow to your spouse or legal partner, to bag another CGT nil rate band to reduce the amount of 18/28% tax you would pay on the increase.

    You could try emigrating to a country that does not tax capital gains.

    If you die before resolving this situation, that would eliminate the CGT problem, but might replace it with an IHT problem.

    There are quite a lot of people living inside the M25 who are dying millionaires, because they were lucky enough to inherit a property worth say £10k in the 1960's and have modestly lived in it ever since.

    What level of tax against such wealth is appropriate makes an interesting debate.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.1K Banking & Borrowing
  • 253.2K Reduce Debt & Boost Income
  • 453.6K Spending & Discounts
  • 244.1K Work, Benefits & Business
  • 599.1K Mortgages, Homes & Bills
  • 177K Life & Family
  • 257.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.