CGT on inherited property

Mary_Hartnell

xylophone wrote: »

I think that you need to look at the precise wording of your grandfather's will.
Life interest of residue or Right of residence?
http://www.primewills.co.uk/will_writers_cambridge.htm#Right of Residence Clause

http://www.primewills.co.uk/

What does every one else get when they click my link?

I am getting this:

Huge price reductions on all caravans
Our premises are situated at:
Cross Roads Garage, 1 Harlton Road, Little Eversden, Cambridge CB23 1HB

Ah this might explain it, both organisations seem to eminate from that organisation that advertised on the telly, suggesting than any fule can build their own web site.

http://www.primewills.co.uk.ipaddress.com/

http://www.1and1.co.uk/

zygurat789

Mary_Hartnell wrote: »

http://www.primewills.co.uk/

What does every one else get when they click my link?

I am getting this:

The original link works OK for me But yours above in this post does not!!!

grey_gym_sock

the websites http://www.primewills.co.uk/default.html and http://www.cambridgecaravans.co.uk/ are hosted on the same server, and there is some misconfiguration.

johncrossy

zygurat789 wrote: »

So your mother owns two houses one of which is worth about £270K and, in total, has about £350K??

Sorry, I forgot to factor in the value of the house in question, so add £270k to that = £620k

I can confirm that she doesn't own a caravan though

With regards who has lived in it and when, the below are my best guesstimates:

Grandfather: 1954-1997 - sole owner during this period
Grandmother: 1954-2013 (March)
Uncle: 1954-1970 (guess) AND 1986-2010 (February) - Also, 50% owner since grandfather's death in Dec 1997, until uncle's death in Feb 2010
Mother: 1954-1976 (guess) - Also 50% owner since grandfathers death in Dec 1997, then 100% owner since uncles death in Feb 2010

Vacant since my grandmother moved into her care home in March 2013

Thanks again one and all

zygurat789

johncrossy wrote: »

Sorry, I forgot to factor in the value of the house in question, so add £270k to that = £620k

I can confirm that she doesn't own a caravan though

With regards who has lived in it and when, the below are my best guesstimates:

Grandfather: 1954-1997 - sole owner during this period
Grandmother: 1954-2013 (March)
Uncle: 1954-1970 (guess) AND 1986-2010 (February) - Also, 50% owner since grandfather's death in Dec 1997, until uncle's death in Feb 2010
Mother: 1954-1976 (guess) - Also 50% owner since grandfathers death in Dec 1997, then 100% owner since uncles death in Feb 2010

Vacant since my grandmother moved into her care home in March 2013

Thanks again one and all

So grandmother lived in mothers house from 2010 -2013. And before that in a house 50% your mothers. Who's an expert on DPR?

Mojisola

johncrossy wrote: »

The property belonged solely to her dad (my grandfather) until his passing on 25/12/97. He left the property to my mum and her brother in equal 50% shares with a life interest in the property to my grandmother.

It's very unfair that someone should have to pay CGT on a property that they inherited but weren't allowed to sell because someone else had a life interest in the property.

xylophone

can you recommend anyone/any firm who can officially handle this for us?

Have you looked at the STEP web site? http://www.step.org/

System

Mojisola wrote: »

It's very unfair that someone should have to pay CGT on a property that they inherited but weren't allowed to sell because someone else had a life interest in the property.

It is my understanding that the CGT clock starts ticking when someone acquires a beneficial interest.
The acid test of a beneficial interest is having the absolute right to require the trustees of the property to pay the beneficiary his share. If the beneficiary has no such right, because another beneficiary has an interest in possession, then he does not have a beneficial interest until, for example, the death of the occupier with the life interest.

johncrossy

zygurat789 wrote: »

So grandmother lived in mothers house from 2010 -2013. And before that in a house 50% your mothers. Who's an expert on DPR?

No sorry, that's incorrect. Grandmother has lived in the house since 1954, however during the course of that time, the ownership has changed:

100% owned by Grandfather from 1954 until his death in Dec 1997.
equally owned by my mother and uncle between Dec 1997 until my uncle's death in Feb 2010.
100% owned by my mother since the death of my uncle.

At no point has my grandmother lived in my mother's primary residence. She's only lived in the same house since 1954 until the time when social services instructed she needed to go into residential care (march 2013).

Hope this clears it up.

holly_hobby

As far as I am aware, the asset will be valued at the point the Interest In Possession trust arrangement ceased ie usually where the beneficiary dies - although it could be argued in this case that the beneficiaries (granny's) entry into long term residential care (at the advice of outside agencies), really amounts to the same scenerio (ie it brings an end to the trust), in that the beneficiary is no longer able to benefit (under her lifetime residency) from the IIP arrangement, whereby the trust has effectively been brought to an end.

With regards to any CGT liability, it is essentially the trust that incurs the bill (albeit the trustess pay HMRC which may be Mum on her own/and or others). Accordingly, the trust has an CGT exemption of £5,450, (increased to £10,900 (equal to personal CGT exemption threshold), if the IIP Trust was for a disabled beneficiary, with any net gain charged at 28%.

Hope this helps

Holly