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Very confused...inheritance tax, CGT, income tax

2

Comments

  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    shavy65 wrote: »
    Thanks G_M. I understand what you are saying, one query though....how will they know how much gain in value there`s been between 8 years ago and the day I sell it?
    The house has never been sold or been on the market since it was built.
    Thanks again.
    You would declare the value at the date of transfer to you, and the sale price when you sell.

    If HMRC suspect you may be telling porkies (eg to reduce the amount of the gain), they will refer it to the local District Valuer, who will compare against the sale prices of similar properties in the area at the date in question.
  • shavy65
    shavy65 Posts: 562 Forumite
    Tenth Anniversary 500 Posts
    "You would declare the value at the date of transfer to you, and the sale price when you sell."


    But it was transferred to me 8 years ago...I don`t recall declaring it`s value to the solicitor back then.
    3.975 kWp System, South facing, 21 degree pitch, 15 x Canadian Solar Elps, Samil Inverter, location NE Scotland (Fraserburgh) Bring on the Sun :beer:
  • Innys1
    Innys1 Posts: 3,434 Forumite
    shavy65 wrote: »
    Thanks G_M. I understand what you are saying, one query though....how will they know how much gain in value there`s been between 8 years ago and the day I sell it?
    The house has never been sold or been on the market since it was built.
    Thanks again.

    Now that's a good question!

    Ideally, you would have had it valued when it was gifted to you. I'm guessing that never happened.

    So, you could try and get a valuation from 8 years ago by contacting a professionally qualified surveyor/valuer. It is possible - a year ago I got the value for a house in 1982.

    Or you could ask for a local estate agent's opinion but they are just likely to guess and the HMRC may well challenge that figure because..........erm............it's a guess.
  • shavy65
    shavy65 Posts: 562 Forumite
    Tenth Anniversary 500 Posts
    Jesus, I thought I was being a good grandchild and helping my Granny. Now it seems I`ve wound up in a high sided financial pit. Bol*ocks.
    3.975 kWp System, South facing, 21 degree pitch, 15 x Canadian Solar Elps, Samil Inverter, location NE Scotland (Fraserburgh) Bring on the Sun :beer:
  • Mrs_pbradley936
    Mrs_pbradley936 Posts: 14,571 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    shavy65 wrote: »
    Thanks G_M. I understand what you are saying, one query though....how will they know how much gain in value there`s been between 8 years ago and the day I sell it?
    The house has never been sold or been on the market since it was built.
    Thanks again.

    There is Government department for this if there is no agreement:

    https://www.gov.uk/government/organisations/valuation-office-agency

    People sometimes use similar houses in the same or very near postcode to find a valuation.
  • Innys1
    Innys1 Posts: 3,434 Forumite
    shavy65 wrote: »
    Jesus, I thought I was being a good grandchild and helping my Granny. Now it seems I`ve wound up in a high sided financial pit. Bol*ocks.

    So far, it has cost you 8 x £2.4k, or around £20k.

    In return, you have granny's house. If the value has gone up by £50k (conservative) in 8 years, at worst, the CGT bill will be 28% of that figure, approx £15k.

    So, as long as the house is worth more than £35k, your quids in. Not many would call that a financial pit

    Not to mention the adoration of your granny for receiving £200 a month from you for 8 years.
  • ognum
    ognum Posts: 4,879 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    shavy65 wrote: »
    Jesus, I thought I was being a good grandchild and helping my Granny. Now it seems I`ve wound up in a high sided financial pit. Bol*ocks.

    Hmm,maybe you thought that but you also thought you were getting a house!
  • shavy65
    shavy65 Posts: 562 Forumite
    Tenth Anniversary 500 Posts
    Thanks for reply Innys. I would def need to sell the house straight away then to pay back the CGT.
    So aswell as the £20k and the CGT we don`t think I`d have to pay anything on potential earnings I could have been making from any rent (at rental market value) from the previous 8 years, as stated earlier?(even though she`s obviously been living there rent free?) If this was the case that would significantly increase the amount I`m due the Taxman.


    Maybe I should mention, I`m in Scotland, I know sometimes there are discrepancies within UK!
    3.975 kWp System, South facing, 21 degree pitch, 15 x Canadian Solar Elps, Samil Inverter, location NE Scotland (Fraserburgh) Bring on the Sun :beer:
  • shavy65
    shavy65 Posts: 562 Forumite
    Tenth Anniversary 500 Posts
    ognum wrote: »
    Hmm,maybe you thought that but you also thought you were getting a house!



    I own 7 year old house of my own for my family of 4, it`s not like I needed anything from anyone. The house was being left to me anyway as per their request, they just thought it would be wise to move it to me back then. the plan was to keep it in the family (meaning I personally wouldn`t make anything from it) but as it transpires I`d need to sell it to pay any CGT I`d owe.
    3.975 kWp System, South facing, 21 degree pitch, 15 x Canadian Solar Elps, Samil Inverter, location NE Scotland (Fraserburgh) Bring on the Sun :beer:
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Probably could have bought the place at full market value with granny having a life interest, with a debt to granny at 200pm.

    No cgt no iht. Just a debt against her estate.
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