inheritance tax or capital gains do i have to pay

pike25

Hi i was left sum money 9 years ago and my sister made me buy a house so i did she put the house in her name just to protect me iv been to the bank and there is no record of me payn for the house as they only keep records for 6 years im wanting to sell the house to move to a new house but iv been told i will be made to pay inheritance tax or capital gains is it true and how much will i have to pay on the house my sister ownes her own house so on paper she ownes 2 houses is this true will i have to pay this tax on my house it is worth 75,000 can you give me any advice please thanks. is there a way round it thanks ,

hearts

Its your sisters house not yours. When she sells she will have to pay CGT. This really needs expert advice and you should consult an Accountant.
I dont know much but from what I do know I think you get the most relief after 10 years.
Deduct what she paid from what it sells for then deduct costs of buying and selling. Then CGT allowance of £9200 then you pay (possibly) 40% of the difference.
I am no expert and this is a rough guide.
So if she paid 25 and sells for 75 profit is 50 then take of costs (say) 5k leaves 45 take off 9.2 leaves 35.8 40% of this roughly 14k tax.
As I say Im not an expert by any means. This is just a rough estimate based on my limited knowledge. As I said go to an accountant.

silvercar

So if she paid 25 and sells for 75 profit is 50 then take of costs (say) 5k leaves 45 take off 40% as it has been owned for over 10 years, leaves 27ktake off 9.2 leaves 35.8 17.8k payable at your marginal rate, 40% of this roughly 14k tax.at 40% tax this would be 7.2k

If the house is in your sisters name then she owns it, has to agree to the sale, receives the proceeds and has the CGT bill.

If she won't agree to the sale or to paying you the money then you need legal advice.

insured

From what you say, there is no inheritance tax to pay.
Inheritance tax would have been paid on the estate when it was dealt with when the individual died.
Capital Gains Tax sounds like it should be payable.
Capital Gains Tax is payable on the difference between sales price and purchase price.
You can also claim taper relief at 5% of the gain for each complete tax year the property was held after the first two years.
In addition there is an annual allowance of £8,800.
Capital Gains Tax is paid at your marginal rate of tax. This means that the eventual gain less all of the above are added to your income and taxed accordingly.
Although it appears that your sister has legal title to the property, you appear to be the benefiical owner.
If you can show to the Inland Revenue that the funds came from the inheritance and you are therefore beneficial owner, the Inland Revenue may make the assessment on you.
There are things you can do to elimate the gain, like nominate it as your own residence. This should be done within 2 years if it is a second home.
If the property has been let at all there is a lettings relief which could also apply.
Hope this helps, but if not PM me. I am a tax accountant. If you give me a few more details I could help you.