Transferring Property as a Gift to Nephew

Savage95

Sorry I maybe misled the situation. My sisters not imprisoned but has no savings to speak of and the only way she would be able to get out would be with mothers assistance by her sale of the house. I'm not in a position to assist as I have a mortgage of my own! I'm not trying to make my mother sell the property but I think she would be happy and willing to help my sister if she knew she wasn't going to have to pay a load of money to the government which she feels she shouldn't have to. That was the main question; does she have to pay CGT? And if so, what sort of figure would it be?

G_M

Savage95 wrote: »

Can anyone help? I believe my mother is in a similar position; she owns two properties, the one she resides in and another which my sister lives in. My sister does not pay rent to our mother ( or rather has not paid any rent since 2013). She is really unhappy where she lives (i.e. the location of this second house) and we are trying to persuade our mother to sell this second house in order that my sister can move to a more desirable area and particularly nearer to her daughter, but our mother doesn't want (as most people!) to pay the government what I assume would be Capital Gains Tax. Is there any way around this legally that I can explain to our mother as my sister is now getting highly stressed in her current situation? Thank you everyone

whether your mother slls the property today, or tomorrow, she will hve to pay Capital Gains Tax as the property is not her primary residence.

So she should make her decision based on whether she wants to keep the property (investment? home for sister/someone else?), or sell and do something ese with the cash.

The only alternative is to keep it till death - CGT is not payable on death (though Inheritance tax may be).

Savage95

Thank you. Excuse my ignorance (I'm grateful for your straightforward typing as I have no idea on this subject) but if the house was worth around £300,000 do you have any inkling as to what my mother would likely pay in CGT and would it be payable after sale or pre sale i.e. could the CGT be paid from the money of the sale?

Pixie5740

Capital Gains Tax the clue is in the name. Tax is based on the gain so only saying that the property is worth £300k isn't enough information for anyone to estimate the tax for you.

Edit:

Here's a link to a thread that includes a sample CGT calculation.

http://forums.moneysavingexpert.com/showpost.php?p=69071134&postcount=6

Pixie5740

Usually the largest outgoing a person has is there rent or mortgage. If your sister is paying neither then surely she should be quids-in and therefore able to save something.

xylophone

Try this https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/

[Deleted User]

I'm sorry but I'm having problems believing what I am reading.

Your mother has been allowing your sister to live rent free in a £300k house for some years. Does no one see anything wrong in expecting your mother to sell the house and incur a tax bill when she doesn't seem to particularly want to sell the house?

I assume if your mother sells the house, you are thinking your sister will then be seen as homeless and given housing by the council. If so, it may not be as easy as that. You are ignoring the fact that your sister may have to live in bed and breakfast while waiting for permanent housing to come up.., she will have to take what's offered (homeless people often only get one offer). I don't know if your sister wants to move to a different part of the country to where she is living now - other councils won't accept responsibility for her normally.

xylophone

I assume if your mother sells the house, you are thinking your sister will then be seen as homeless and given housing by the council.

I thought the idea would be that either mother would lend the daughter the cash from the sale to buy a property in a favoured area or would buy a house in a favoured area and allow her daughter to occupy it.

If option one, then mother would not only be paying CGT but also the additional SDLT for buying a property in addition to her own PPR.