Selling a gifted property

smokey10

My Mum gifted her house to me (her daughter) and my brother in 1996 but continued living there until recently.
The house now needs to be sold.
Will we need to pay Capital Gains Tax and if so, how is this worked out between the 2 of us ? Is the allowance £12,300 each?
Thank you

Jeremy535897

The gain will be the proceeds of sale, less selling costs, less market value in 1996. A return must be completed, and tax paid, within 30 days of the sale being completed. You and your brother will pay capital gains tax on half the gain, and you each have your CGT annual exemption unless used elsewhere. That is assuming that the gift was outright, and not to some form of trust for the two of you.

It looks as if your mother may have made a gift with reservation in 1996, and when that reservation ended, she will be treated as having made a potentially exempt transfer for inheritance tax, which means it will be included in her estate if she dies within seven years of the reservation coming to an end.

smokey10

Thank you. I forgot to say that I thought I read somewhere that if the property was occupied by a dependent relative, we would not have to pay?

Jeremy535897

You had to provide a house to a dependent relative rent free before 6 April 1988.

Keep_pedalling

You house will also part of your mother’s estate for IHT purposes as it was a gift with reservation so never fell out of her estate after 7 years from the date of the gift

Any chance that would push her into estate into IHT territory?