Inherited Property Issue

BobQ

oldsmokie wrote: »

These rules are remarkably unfair when the property wasn't an investment and where I can't get PPR exemption anywhere because I rented.

The property may not have been acquired with the intention of it being an investment but it has been an investment which since 1993 will have increased its value substantially.


Its not clear to me the circumstances in which you acquired the property: that is whether your mother left you a 50% share of the house which she owned outright or as a tenant in common, or whether your father inherited the house and chose to transfer it to you to minimise a future IHT liability or avoid care home fees. If the former it seems only right that you pay CGT on your asset. If the latter you have gained in other ways so again its only fair that you pay CGT.

oldsmokie

BobQ wrote: »

The property may not have been acquired with the intention of it being an investment but it has been an investment which since 1993 will have increased its value substantially.


Its not clear to me the circumstances in which you acquired the property: that is whether your mother left you a 50% share of the house which she owned outright or as a tenant in common, or whether your father inherited the house and chose to transfer it to you to minimise a future IHT liability or avoid care home fees. If the former it seems only right that you pay CGT on your asset. If the latter you have gained in other ways so again its only fair that you pay CGT.

Just to be clear, I inherited my interest in the property. My parents severed their joint tenancy in 1991 and I inherited my mother's share in 1993. My father then arranged for the tenancy in common to be converted to a joint tenancy.

As I owned my own house between 1993 and 2004, I got PPR benefit on that when I sold it. I would therefore be happy with a CGT liability on the parental home over that period.

What I think is a little unfair is that I have rented from 2004 to date and I have lost the ability to elect the parental home as my PPR as well. In retrospect it might have been better to go on the electoral roll there and have paid half the council tax!

Gas_Powered_Toothbrush

oldsmokie wrote: »

What I think is a little unfair is that I have rented from 2004 to date and I have lost the ability to elect the parental home as my PPR as well.

Please explain how it is unfair that you don't get PPR relief on a property you didn't live in.

oldsmokie

Gas_Powered_Toothbrush wrote: »

Please explain how it is unfair that you don't get PPR relief on a property you didn't live in.

I've been quite careful to temper my comments about this by using "rather" and "a little" rather than ranting about it. I can see the argument about why this gain is taxable. However, everyone is entitled to have an opinion when they are asked to pay tax.

patanne

Feel free to shoot this down in flames & of course it all depends on whether the numbers work for you. You said it would be inconvenient to live there, but would it be quite as inconvenient if you lived there Fri to Mon & lodged somewhere Mon night to Fri morning. That way all your things could be changed to that address incl electoral register. This also would depend on your circumstances too.

uknick

OP, if you want to get PPR by living there for period, this thread may be of use with regard to what HMRC consider a qualifying period;

http://www.accountingweb.co.uk/anyanswers/question/how-lon-do-you-haive-property-claim-ppr

jimmo

Take another look at Savvy_Sue’s post at #16.
The fact that your parents severed their joint tenancy and became tenants in common has the hallmarks of an Inheritance Tax planning exercise but, even in 1991 it would have been clear that if the first to die left their interest in the property to you that would generate a potential capital gains tax liability when you eventually sold the property.
As a generalisation capital gains tax is cheaper than inheritance tax and if your father’s advisor got it right then, even after paying the capital gains tax, you will be better off than if your father had inherited your mother’s interest in the house and then left his entire estate to you.
If your father’s advisor got it wrong you should be concentrating on whether you can “sue the pants off” your father’s professional adviser rather than bleating about the unfairness of a tax system that was already in place when your parents severed their joint tenancy.

John_Pierpoint

Why were you renting ?