Capital Gains Tax on property given to me for free as a gift

Waadi001

My mother and father purchased a local authority three bedroom leasehold flat under the right to buy scheme many years ago. The overall cost was not too much so were able to buy it without a mortgage.
My father passed away some years back. My mother then gave me the property in 2006 as a gift and came to live with me and my family. I did not pay anything other than the solicitor's costs to have the property transferred to my name.

The property back then would have been around £270,000 if my mother had sold it rather than given it to me as a gift.
Since 2006 the property has been on the rental market.

I remortgaged this property two years ago, took out a buy-to-let mortgage at 75% ie £180,000 when property was valued at £240,000. The fee was very high and my estimate is the outstanding mortgage is still around £180,000.

I have now decided to sell this property as the mortgage offer period has come to an end. The property has now been put on the market for £280,000.

I wanted to find out how much Capital Gains Tax I would be liable to pay if the sale went through at £280,000 bearing in mind the property was a gift to me and therefore I did not pay any money for its 'purchase'.
Furthermore would CGT be calculated:

on £100,000 (£280,000-£180,000) after I have repaid the existing mortgage, or

on the full £270,000 as when I got the property that was how much it was worth and I did not pay anthing, or

on £10,000 (£280,000-£270,000) the change in the value of the property from when my mother transferred to me to the current sale price.

Also what would be the rate that CGT would have to be paid. Thanks.

anselld

CGT will be due on ...

Price you sell for
less value when it was gifted to you
less any buying and selling fees
less any capital improvement work you can evidence
less your CGT allowance ( 10,900)

The tax will be 18% or 28% if you are higher rate.

So should not need any CGT provided you can demonstrate the 2006 value convincingly.

Waadi001

Thank you so much your response anselld.
I have to say I am very relieved as was thinking I may have had to fork out on the whole £280k!