Liability for CGT

DumbAss_2

Hi, Hope someone bright out there can assist.

Wife has a property in her name (she is not on our main home mortgage) that she bought in 2002 and that my mother lived in rent free until she died recently. Now selling the property but can anyone advise whether we are liable to CGT. Bought house for approx half of market value from another relative who didnt want to look after her.

regards

Bean_Counter

More than likely yes. Difficult to say definitively without figures to go on.

DumbAss_2

Property bought got £75k in Jan 02, selling for £160k now.

Does it not make any difference that our main home is solely in my name and the other one solely in my wife's?

Bean_Counter

Has your wife ever lived in the property that you are going to sell? Did you get married in 2002 or later?

Reason I ask is that as a husband and wife, as far as I am aware, you can only have one residence elected as your main residence for CGT relief purposes. The names on the mortgage are irrelevant.

DumbAss_2

She has not lived in it but mortgage details have always been send to that address - is there a way of using this to our advantage? We married in early 90's.

Could we nominate her property as our main one so as not to have to pay CGT now but at the point at which we sell our main home?

Bean_Counter

DumbAss wrote: »

Could we nominate her property as our main one so as not to have to pay CGT now but at the point at which we sell our main home?

I think not, as you would have to have made the nomination within two years of the date that you had the combination of residences.

You are entitled to the standard taper relief (15% of the gain I think), plus your annual CGT allowance of £9,200 for this year against the computed gain.

DumbAss_2

cheers for your help

CLAPTON

i think (but alas am not sure) that for CGT purposes its the market value that counts ... usually of course this is the purchase price but as i understand you her purchase price was not the actual value at the time.. might be worth getting some advice.. can try phoning the HMRC .. you dont have to give your name.

also she can transfer half the house to you and then you can both use your CGT allowances

silvercar

After 5 years of ownership, CGT relief would be 20%.

Having lived in it would have helped the CGT bill massively. Without living in it you are a bit stuck as a married couple can have only one PPR.