Capital Gains-how do i find out historical house price?

tingly

Hi there
I was gifted my lovely mums house back in 1987 and my mum and dad continued to live there, whilst i looked after them.

My mum has passed away recently and i am trying to work out what cgt would be payable if i should sell the house. I am trying to work out whether to sell or rent, although to be honest both options are hugely painful, but i cant just leave it empty- although id like to!

Anyway, i have been trying in vain to find out how much the house was worth back in 1987. I have tried local agents but come up blank.

Has anyone got any ideas please?
Thankyou

dingy_2

Is that how it works? you pay based on 1987 rates? Thats good isnt it?

Could you look at what the council tax band is? those are valuations based on 1991 prices so could estimate based on that - council will tell you the banding if you call them up, and can google to see how that relates to house prices, its a good a starting point as any I think!

tingly

Thanks i will give em a go.

No for the basics of cgt- although its quite a calculation- you take the value of what it was worth when you got it from the value that you receive on selling. That gives you the gain on which the tax is applied. There are various allowances applied , based on how long you lived there over how long youve owned it for etc etc, and this is taken off before the tax is applied.

Thrugelmir

Find a professional surveyor.

http://www.rics.org/uk/

HMRC may well question the basis of the valuation otherwise.

Wh05apk

I am not sure it is as simple as that, as your parents continued to live in the property I think it would have been a "gift with reservation" meaning their care costs could have been claimed back, if that is the case, presumably the value would have been when your mother passed away? I think you will need to seek advice from an accountant on this.

dunstonh

I agree with above. There is the potential for inheritance tax here and if means tested benefits were involved, then there could be a clawback on those. Information is shared and these things can come back and bite you many years later.

I'm afraid it seems the gifting of the house looks, based on limited information, to be a bad decision that only the treasury are going to benefit from.

Wh05apk

dunstonh wrote: »

I agree with above. There is the potential for inheritance tax here and if means tested benefits were involved, then there could be a clawback on those. Information is shared and these things can come back and bite you many years later.

I'm afraid it seems the gifting of the house looks, based on limited information, to be a bad decision that only the treasury are going to benefit from.

Unfortunately a lot of things are done by people thinking they are being clever, but only based on limited knowledge, I am just trying to unravel my inlaws estate, there is an unwitnessed codicil on a copy of the will, and the will itself was incorrect as listed the house as an asset, however it was owned by MIL in sole name, not a major issue, but just enough to delay things.

TrickyDicky101

The OP didn't ask about IHT though did he (which has no impact on CGT due). For CGT purposes, it is the open market value at the time of the gift.

Raggie

you could always use the Nationwide HPI calculator..


enter the value today.. then selected the location of property and the date .. as long as its before 1973 (and in your case it is) then you will get a figure..


you may have to discuss with HMRC if they will accept it, but its as good a way as any..


Rags

dunstonh

TrickyDicky101 wrote: »

The OP didn't ask about IHT though did he (which has no impact on CGT due). For CGT purposes, it is the open market value at the time of the gift.

The OP didnt but the OP may not be aware that IHT is still a potential issue as the gift never started the 7 year countdown. HMRC look at both aspects. I had someone in a similar position that got a tax bill for IHT and CGT some 5 years after the sale of the property. With IHT allowance high (especially if spouse allowance transferred) and if in a low property value area, there may not be an issue.

It may not help the OP but it may help others who think that gifting property to children is a good idea to avoid tax when in reality it can double it.

tingly

Thanks for all the advice
The nationwide hpi calculator did it.
I may just rent anyway that way i can maybe move back there if i make old bones, and finish my days in the house where i was born, which will mean a lot to me.
I did not know about the iht implications so thanks for that.
Just for general info the house wasnt gifted as a method of bypassing tax or anything like that, it was because of a complex range of personal reasons- we werent that sophisticated!,,
Thanks again everyone