Capital Gains / Second Property

pmoney

Hi all, looking for some advice please.

My mother and father purchased a second property in which my sister has been living.

They would like if possible to minimise / avoid paying Capital Gains tax if they sale this property.

Is there any way to do this?

One thought was if my mother lived there with my sister for a certain length of time..?

Thanks in advance.

Paul

CLAPTON

A married couple can have only one principal private residence so your mum moving into the second property would not work.

Is your sister paying the mortgage / council tax etc for the property.. if so it could be argued that she is the beneficial owner and so no tax is liable however the HMRC would need some convincing of this.

They could sell their primary house and move in to the second house which will reduce the eventual cgt liability.

Otherwise they will be liable for the tax although they each have 9,200 cgt allowance to offset against it.

pmoney

Thanks for your help Clapton.

Yes my sister is paying the Council Tax and the bills but I dont think there are mortgage payments to pay on the property but from what you say it would be tough / a long shot to make the beneficial owner case?

Paul

CLAPTON

A 'typical' situation where it might be accepted by the HMRC is where someone couldn't get a mortgage (maybe poor credit rating etc) in their own right so a parents gets the mortgage but the offspring actually pays the full mortgage amount, council tax, utilities etc and so it truely the 'real' owner.

In this situation I dont really know enough about the background but it doesn't seem like a realistic case.

pmoney

Okay I understand - thanks!

It looks like the CGT will have to be paid offsetting expenditures and using their individual allowances.