At what point is Capital Gain Tax due?

AnotherJoe

There's not going to be any CGT in that case, since the most it would be is 1/3 of any rise in price since 2014.

It sold for £84k and was worth £54k in 2004 so that's £30k over 13 years, so less than £2k a year so let's say it was worth £2k x 4 years less in 2014 so you've gained 1/3 of £8k which is well under the £11k allowance. Doesn't even need reporting.

xylophone

therefore his share will have transferred over to my mother I assume.

If all three were joint tenants at the time of your father's death, then you and your mother were the remaining joint tenants.

http://realestate.findlaw.com/buying-a-home/difference-between-joint-tenancy-and-tenancy-in-common.html


Right of Survivorship

One of the main differences between the two types of shared ownership is what happens to the property when one of the owners dies. When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners. For example, if three joint tenants own a house and one of them dies, the two remaining tenants each obtain a one-half share of the property. This is called the right of survivorship.

[Deleted User]

So does the overall gain in value have to be a set amount per year?

[Deleted User]

Really, even iy you took it at the £29,000 purchase price in 2005 and the sale price now of £84,000, that is 55k between us both, meaning my share is £27,500.......of which over the last 12 years I lived in the house for 9 of those 12 ...meaning £6875 of the overall sale value would potentially be taxable. Even if that were the case (please correct me if I am wrong) what rate of tax would be due on that? 20% standard rate? So we are talking £1375 worst case scenario?

[Deleted User]

Although realistically, as the house was valued at £54,000 in 2005 it would be significantly less. How could you prove this though? as I have no documents confirming the valuation? or would it go on the actual sale price?

xylophone

You do understand the difference between joint tenants and tenants in common?

See my link in post 13.

Have you seen the reply by 00ec25 post 14 here?

https://forums.moneysavingexpert.com/discussion/5547931

AnotherJoe

[Deleted User] wrote:

So does the overall gain in value have to be a set amount per year?

No that was back of a fag packet to estimate what it was worth 4 years ago. It could have stayed at £54k until last month then suddenly jumped to £84k. But i doubt it

AnotherJoe

[Deleted User] wrote:

Really, even iy you took it at the £29,000 purchase price in 2005 and the sale price now of £84,000, that is 55k between us both, meaning my share is £27,500.......of which over the last 12 years I lived in the house for 9 of those 12 ...meaning £6875 of the overall sale value would potentially be taxable. Even if that were the case (please correct me if I am wrong) what rate of tax would be due on that? 20% standard rate? So we are talking £1375 worst case scenario?

Nothing. You have a CGT allowance each year of around £11k. EG if you make £11,500 theres only tax to pay on the £500 over that. Since you are well under it theres nothing.

[Deleted User]

Hi again

Thank you all for your responses. I have just done some research and by looking at the way the deeds are worded confirms that we are classed as "tenants in common", although I'm therefore assuming that this would be irrelevant anyway if the CGT allowance is below £11k. No set percentages of ownership were set out by ourselves, so I assume we all own a third by default....and therefore now me and my mother own 50% each.

xylophone

You were asked in more than one post how the property was owned.

Have you read the information concerning tenants-in-common?

Did your father die intestate?

If so, his equitable share passed under the laws of intestacy.

http://www.land-registry-documents.co.uk/information/joint-ownership-tennants/

Have you read through post 14 here?

https://forums.moneysavingexpert.com/discussion/5547931

The house is being sold- I suggest that you check the situation with the solicitor acting in the purchase ,particularly if the new house is to be owned by your mother alone.