death in family tennant in common

mariamcb

Hi all thanks so much- basically I had no written formal agreement with mum on the % I own. So when I come to sell I will declare the 18% to HMRC but will they ask for proof. ??? Don’t want to get hammered for 50% on cgt.

Yorkshireman99

mariamcb wrote: »

Hi all thanks so much- basically I had no written formal agreement with mum on the % I own. So when I come to sell I will declare the 18% to HMRC but will they ask for proof. ??? Don’t want to get hammered for 50% on cgt.

There has been a lot of sidetracking that has only confused the whole issue. Go and see a properly qualified solicitor and get him to deal with the whole thing including the sale. Anything else will end in disaster.

Tom99

mariamcb wrote: »

Hi all thanks so much- basically I had no written formal agreement with mum on the % I own. So when I come to sell I will declare the 18% to HMRC but will they ask for proof. ??? Don’t want to get hammered for 50% on CGT

[FONT=Verdana, sans-serif]To the best of my knowledge they do not ask for proof. I have very recently returned a CGT calculation where tax was payable based on 25% beneficial ownership. I filled in the 2017/18 self assessment and the tax to be paid was automatically calculated and subsequently paid.[/FONT]

[FONT=Verdana, sans-serif]It might actually be in your interests to claim you now own 59% for two reasons.[/FONT]

[FONT=Verdana, sans-serif]If the property sells for the same as probate value there will be no gain on the 41% you have just inherited but you will be able to claim 59% of the disposal costs.[/FONT]

[FONT=Verdana, sans-serif]If the property falls in value from probate value to the time you sell it you will make a loss on the 41% you have just inherited and this will be offset against the gain you have made on the 18%.[/FONT]

[FONT=Verdana, sans-serif]The computation of CGT for 59% will not be particularly complicated, you will just calculate your acquisition costs as 18% of £76,000 plus 41% of £280,000 = £128,480 and your disposal deduction will be 59% of EA, solicitors etc.[/FONT]

[FONT=Verdana, sans-serif]If I was you, I would wait until the property sells before you decide what to do, you do not have to claim you own 59% now, only when you submit the CGT return so you have plenty of time to think things through.[/FONT]

[FONT=Verdana, sans-serif]For example if the property falls slightly in value and you sell for £260,000 next year, with disposal costs of say £5,000, the gain on 59% would be:[/FONT]

[FONT=Verdana, sans-serif](£260,000 - £5,000)*59%=£150,450 less £128,480 = £21,970[/FONT]

[FONT=Verdana, sans-serif]Whereas your gain on 18% would be:[/FONT]

[FONT=Verdana, sans-serif](£260,000 - £5,000)*18%=£45,900 less (£76,000*18%) = £32,220[/FONT]

[FONT=Verdana, sans-serif]Which will be a saving in CGT paid of between £1,845 and £2,870 depending on whether you pay CGT at 18% or 28%[/FONT]