New house now owned

Kelly_Heroes

Hello

I have gained a house through my mother. The value of the house is £115,000.

My mother and father have there own house else where which they live in.

I only have this house now its in my name. I pay all the bills to this house now. My mother has to live for the 7 year rule not having to pay any tax on the house then.

My question is what if I want to sell this house to buy another. The 7 year rule what's left of it 6 years does this pass over to the next house or what happens. This May will be 1 year since I've owned the house.

G_M

As Penitent says, it's the size of the gift that matters, not whether it was in the form of cash, a property, shares, a helicopter or anything else.

It is also irrelevant what you do with the gift. You can give it away yourself, sell it, set it on fire, whatever.

You still received a gift of value £115K

Do you now live in this house? If not, Capital Gains Tax may also be relevant in due course. As will Additional SDLT if you buy a 2nd property.

getmore4less

If this is the only gift she has made then there is no IHT on that gift( by you or the estate) as it will be under the nil rate band.

as this looks like it may not have been the main residence then a CGT assessment will be needed and mum may have a tax bill to pay.

Thrugelmir

Kelly_Heroes wrote: »

I have gained a house through my mother.

how did your mother acquire the property?

G_M

getmore4less wrote: »

If this is the only gift she has made then there is no IHT on that gift( by you or the estate) as it will be under the nil rate band.

as this looks like it may not have been the main residence then a CGT assessment will be needed and mum may have a tax bill to pay.

?? Surely it depends on the total value of the Estate at the time of death? Not the value of the gift. And mum owns another property..... The combined value of the other property (or share), + gift, + the helicopter, car, jewelry etc may well exceed the NRB. Of course it's further complicated by the possibility of assets transferring to the spouse, so dad's date of death also may become relevant.

But yes, if the property was not mum's main residence before the gifting, then CGT may be due.

Kelly_Heroes

Thrugelmir wrote: »

how did your mother acquire the property?

The property was passed on through somebody who passed away 20 years ago then my mother had it.

Kelly_Heroes

G_M wrote: »

As Penitent says, it's the size of the gift that matters, not whether it was in the form of cash, a property, shares, a helicopter or anything else.

It is also irrelevant what you do with the gift. You can give it away yourself, sell it, set it on fire, whatever.

You still received a gift of value £115K

Do you now live in this house? If not, Capital Gains Tax may also be relevant in due course. As will Additional SDLT if you buy a 2nd property.

I only own this one property.

I would only sell this house to buy another property so I would still only own one property still.

I've been doing the house up for 12 months doing jobs to it all while I'm working in spare time. It needed doing as things needed updating inside and the decor and gardens etc. I've still paid all the bills full council tax, house insurance, electric, gas and water still being used when there or not to keep the place good. I have the bills to show all this to this address. I've only stayed with my perents while doing the property up.

It wont make a difference if I own one property. But I stay with my perents at there place while doing mine up. I still own just one if I stay there or not. Why would there be capital gains tax on this?

I thought the capital gains tax was if you owned 2 property and lived in one. Then the other you don't live in and you sell that one you pay capital gains.

I know my mother will payed something for the gift. Then there the 7 year rule to go with it.

dimbo61

Your mum may have to pay capital gains tax ?
Did she live in the property ?
As both mum and Dad are still alive ? They have a joint inheritance tax allowance of £850,000 so if mum and dad died within the next 7 years and the entire estate was worth more than £850,000 there maybe inheritance tax to pay.

getmore4less

G_M wrote: »

?? Surely it depends on the total value of the Estate at the time of death? Not the value of the gift. And mum owns another property..... The combined value of the other property (or share), + gift, + the helicopter, car, jewelry etc may well exceed the NRB. Of course it's further complicated by the possibility of assets transferring to the spouse, so dad's date of death also may become relevant.

But yes, if the property was not mum's main residence before the gifting, then CGT may be due.

The gift uses the nil rate band first, relevant gifts, if under the nil rate band have no tax liability.

The estate just gets a smaller nil rate band.

getmore4less

Ask her if when she gifted it to you did she pay any CGT?

You need to establish your base cost for the future just in case you need it.

Kelly_Heroes

dimbo61 wrote: »

Your mum may have to pay capital gains tax ?
Did she live in the property ?
As both mum and Dad are still alive ? They have a joint inheritance tax allowance of £850,000 so if mum and dad died within the next 7 years and the entire estate was worth more than £850,000 there maybe inheritance tax to pay.

There both still alive the estate shared out between 3 of us was 345,000. I got 115,000 as my share.

The estate was a lot less then £850,000