Selling a gifted property

AnnaF11

In 1999 my father in law (still living) gifted my husband a property which was lived in by his mum (my husbands grandma). Grandma continued to live there rent free until her death in 2013. The house was solely in my husbands name until 2018 when we added my name to the deeds also.

My husband is a higher rate tax payer and I am a lower rate taxpayer.

If we sell this property what are the rules on tax that we would be liable for? Do we pay CGT on the whole value, or just the difference in value from the date of transfer to the date of sale, or do we only pay tax on the increase in value since grandma passed away?

Any advice welcome as we are being told lots of different things and we are getting very confused about our tax liability.
Many thanks. Anna

pphillips

CGT is chargeable on the increase in value since your husband was gifted the property less any costs involved in the acquisition, sale and improvement of the property. CGT would have been postponed when a share of the property was gifted to you. As the property is now owned by both of you, you each benefit from a CGT annual allowance of £12.000 from 6th April 2019. If you ever lived in the property you can also deduct private residence relief for the relevant years.