Will we pay capital gains tax?

thestens

My mum is now in care and I have power of attorney. She owns 2 flats - the first she has owned for about 14 years and it is tenanted. The second was her home and to help fund the care home, I am preparing to let it or sell it. It would be more straightforward to sell it but we will make a loss on the purchase price - she bought it new in 2007 and will we have to pay capital gains tax as well as the other fees? If so does anyone know how much that is? We would hope to sell at around £100 000.

getmore4less

Why do you think there is capital ganes tax on a loss?

what was it bought for in 2007

thestens

I don't know what you pay capital gains cost on! I don't know anything about capital gains tax! Somebody just said to me that if you sell a property and you have another one - ie it could be said not to to be your sole residence - there might be tax to pay. It cost about £120 000 in 2007. I am just trying to get the best deal for my mum!

mjdh1957

Basically, it's a tax on the gain made by the capital value of assets.

There are exemptions for main residences, so the second property should be exempt. And there is an annual tax-free allowance.

Mojisola

Here's some reading - https://www.hmrc.gov.uk/cgt/

If you sell the flat that was her home, there won't be any CGT to pay.

agrinnall

There would under most circumstances be no CGT to pay on the property that was her home even if it had made a profit. Don't listen to 'a bloke down the pub'.

There may be CGT to pay when the tenanted flat is sold if a profit has been made and that amount is above the Annual Exempt Amount (currently £10,900).

Lots about CGT here:

http://www.hmrc.gov.uk/cgt/intro/basics.htm

thestens

Thank you. Very helpful.

BitterAndTwisted

What's the sense in crystalising a loss on the property she lived in when there is another presumably with some equity in it? Selling at a loss patently won't pay any for care-home fees and doesn't sound like acting in her best interests