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Second Property Tax Advice
Comments
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On reading up on the CGT bill, I'm assuming it could be approx £50-£60k.AnotherJoe wrote: »"If HMRC cotton on there will be a whacking big tax bill to pay."
But would that tax bill be on us or my mother-in-law?0 -
On reading up on the CGT bill, I'm assuming it could be approx £50-£60k.
But would that tax bill be on us or my mother-in-law?
Mother-in-law, as she is the one that has triggered the CGT liability by selling a property that has made a gain in value.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
It was due in the tax year that she transferred the property.
Depending on when this was she may have until the end of January to pay, or it was due last year and she is already evading tax and could be prosecuted.0 -
The grandparents gave their home (PPR) to their daughter in around 2006 and died two years later. They continued to live in the property and did not pay a market rent to their daughter?
If so, this was a gift with reservation of benefit - even though they did not own the property at the time of their deaths some two years later, it should have been reported when probate was sought - IHT may or may not have been payable.
What was the market value of the property in 2006?
Their daughter (your MIL) lived in her own home at the time she was gifted her parents' property and has not lived in the gifted property since receiving it.
At the time that MIL went into care, she owned two properties, her own PPR and the property gifted by her parents.
She has just gifted her parents' property to her own daughter (your wife).
It is likely that she has CGT to pay on the difference between market value in 2006 and that in 2018.
Presumably she has either existing savings or money from the sale of her PPR to meet the CGT bill which she will report on her 2017-18 tax return.
If the money to pay for her care runs out, then the gift of the property to your wife could be regarded as deprivation of assets.
Your wife could be looking at needing to sell the property to finance her mother's care.
If your MIL dies within seven years of gifting the property to your wife, it may be that there will be IHT to pay.0 -
Thank you for all the advice. I think its time to arrange a meeting with our accountant!0
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