CGT - Scenario / questions

sfc87

Hi all

Currently researching CGT on behalf of my parents - my general understanding is okay, and having completed a CGT calculator with estimated figures I feel I’m on the right path. I just have a couple of questions around the specific scenario:

My mother’s mother passed away in 2012, with the property being left solely to my mother.
She has not lived in the property during this time, it has either been unoccupied or occupied rent free by my sister (some bills in my sisters name, some in my mother’s).
Now looking to sell the property for retirement and to gift to my sister (to purchase her first property) and myself (to upsize). Any sale would be very unlikely before the new tax year in April.

Are there any ways based on the above to minimise any CGT, or smarter methods to limit the impact? Further, are there any considerations for other taxes (e.g. inheritance?).

Many thanks in advance.

xylophone

Your father and mother are still married and have a home of their own?


https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

https://www.litrg.org.uk/tax-guides/bereavement/what-nil-rate-band

Your late grandmother's property belongs solely to your mother?

If she had gifted half to your father in earlier years, it could have been possible to reduce the CGT impact ( both using CGT allowance) but gifting now just before sale could be looked at askance by HMRC.

Your mother will need to calculate CGT and make any appropriate payment.

https://www.gov.uk/tax-sell-property/work-out-your-gain

The cash gifts to you and your sister will be PETs.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/potentially-exempt-transfers/

tebthereb

What’s the gain in value since grandmother’s death?

There will of course be some planning you could do ahead of sale... you should speak to an advisor if the values are large.