Question re CTG on Mum's house

shirleytch

9 years ago my mum signed her house over to my brother and myself. She now lives with me. We are thinking about selling her home but wonder would we be liable for CGT. Does anyone know?

Thanks in anticipation

booksurr

since becoming owners have either you or your brother llived in mother's house as your only/main home?

if no then you are each liable for CGT on the gain from its market value 9 years ago to whatever you sell it for,

obviously the gain will be split between the 2 of you according to your respective ownership share

shirleytch

Thanks booksurr. Do you know is it definitely the market value 9 years ago rather than the cost of acquisition ie zero?

Tx in anticipation

Savvy_Sue

definitely the market value 9 years ago (which is almost certainly very good news for you!)

You also have a CGT allowance each year, so if you want to give the current value, the value on acquisition, and the month and year you acquired it someone will work out roughly what you owe or point you to the information you need to work it out yourself.

booksurr

please confirm if either of you have lived there as your main home as it makes a huge difference

note you do not get an allowance "each" year, each owner gets it once in the year of sale only, currently it is £11,100 so you get that, as does your brother. The gain obviously being split between the pair of you and each of you liable for your own respective tax position

you and your mother are "connected persons" in tax speak therefore the law requires market value at point of acquisition - this is to safeguard against assets being passed down the generations where there would ordinarily be CGT to pay (eg second homes, artwork, BTL etc). Where the main home is concerned your mother is liable to CGT because she has given it away, however she can claim 100% tax relief because it was her main home whilst she owned it (we assume!)

shirleytch

Booksurr - thanks so much for your advice. None of us have lived there over the last 9 years so will bear this mind.

Thanks again for your help.

alun4

Are you Married? Have you considered transferring part of your share to your spouse?

getmore4less

The other thing to remember is for IHT PET purposes the 7 year clock starts when she moved out, not when she signed it over

p00hsticks

booksurr wrote: »

note you do not get an allowance "each" year, each owner gets it once in the year of sale only, currently it is £11,100 so you get that, as does your brother. The gain obviously being split between the pair of you and each of you liable for your own respective tax position

I understand the point you are making but it's led to you saying something that's not true. Everyone DOES get a CTG allowance each year - currently £11,100.

What I think you meant to point out is that th CTG allowance is on a 'use it or lose it' basis - you can't carry forward any unused allowance from year to year. So if you make a large gain in one particular year (such as potentially when selling a house), you can only use the current years CTG allowance, not the total of all those allowances for the years you've had the house.