Cgt jointsecond home

bluecfc

Hi
brother in law helped his parents buy their home 1979 £8K. He had half share and lived there till approx 1995. Parents have both now passed away and house has been sold for £200K Will states that he gets his half share and rest is split between his brothers and sisters. Is he liable for any CGT, if so how much. I can see lots of possible relief items. Property purchased before 1982 so can use that cost valuation. Lived there for about 15 years so that should half CGT.
Thanks in advance for any responses

jimmo

You may need to revise your question because if your brother in law originally purchased a half share of the house he still owned a half share of the house at the point of sale and has been left nothing by his parents.

If he contributed to the initial purchase as a gift but didn’t legally or beneficially own anything that would be different and the tax consequences would be different.

xylophone

Did your BIL make a loan to his parents to enable them to buy the house? Or a gift? Is there formal evidence of either of these situations if so?

Or did he buy a half share of the house and this is evidenced on the deeds of the house?

Pennywise

If he owned 50% in the home, why would there be any mention of his 50% share in the parent's will? The parents would only own their 50% to be distributed under the will - there's neither need nor use to mention the OP's 50% share. That tends to suggest that the OP wasn't the actual beneficial owner of "his" 50% in the first place - i.e. the will gives him his 50% when the parent's die.

I think the first stage is to ensure that the deeds etc properly reflects the OP's pure ownership of the 50% from the outset. Once that is established, then it's time to look at the various reliefs and allowances available.

xylophone

If he owned 50% in the home, why would there be any mention of his 50% share in the parent's will?

This is what we are trying to establish - OP is not clear.

brother in law helped his parents buy their home 1979 £8K. He had half share

Will states that he gets his half share[/QUOTE]

???

bluecfc

thanks for points so far. try to clarify a few points. this seems far more complicated than I thought.
Definately purchased with parents all legal on deeds with mortgage. they bought half he bought half no gifts loans or anything.
The will was just clarifying his ownership as part owner to make clear to rest of family of the situation. He does also get a share of the remainder.

xylophone

If the house was half his and evidenced at the Land Registry then the parent had no right/need to mention it in the will.

It was his PPR until 1995 but presumably he then moved elsewhere - there may be CGT to pay on the proceeds of half the sale which belong to him absolutely. http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm

CLAPTON

what exactly does the land registry say?

jimmo

Did either of the parents reach age 65 before 5 April 1988?
If so there will be a claim to Dependant Relative Relief.
If not it may also be worth considering the other conditions for a claim.

http://www.hmrc.gov.uk/manuals/cgmanual/CG65575.htm

http://www.hmrc.gov.uk/manuals/cgmanual/cg65577.htm