CGT on 2nd property

Steven66

Hi, Looking for guidance please


My brother , sister and I bought our mothers house many years ago (~1991) and provided he her with life rent (free) till she died last year.


We have done some improvements and maintenance on the property, paid Building Insurance etc. Can we offset any of this against CGT.


e.g. Property Cost 30K, Value less selling costs is 120K
Difference 90K.
I realise there are 3 of us so tax would be based on 30k - CGT limit * xx%


Is there are other valid expenses we can offset against?

laticsforlife

Most of the other costs are incorporated in the buying and selling prices, so your improvements etc.

You will be able to offset the legal costs of selling against CGT but that's about it.

00ec25

so are you trying to argue that she held a beneficial life interest in the property and therefore you are exempt from CGT for the period until she died?
I doubt you will be able to substantiate that without paying a professional for proper advice.

if on the other hand you simply want to close out the sale and settle up then yes, you need to establish exactly what the "improvements work" was for, decide if it qualifies as "enhancement expenditure".
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15150p

If it does then deduct it from the 90k gain you have identified and pay tax on the reduced gain split between the 3 of you as you say and then each person deducts their own CGT allowance to arrive at the figure each person will be taxed on individually