CGT on flat I bought for my mother in 2000 to live in rent free

Jeremy535897

xylophone said:

The 36 month rule as quoted by Xylophone no longer exists.The manual is out of date. It was reduced to 18 months, then 9 months from 6 April 2020. Not that this matters, as because the property was never occupied as a main residence by the owner, there is no main residence relief due at all. 

Yes  - but the OP's original post was asking whether he qualified for "dependent relative relief" because he purchased a property for the rent free occupation of a dependent relative.It did indeed used to be the case (before 6/4/88) that the purchaser of such a property qualified for full CGT relief on sale as though for his own PPR  - if the relative ceased to occupy the property the 36 month concession (later reduced as you point out) applied.

See

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65671

  The OP purchased the property  to which he refers in 2000 so no concession at all in respect of CGT could apply.

I had no doubt you understand the current position, but as Mickey666 didn't realise that the 36 month rule had gone, I thought it best to clarify (although main residence relief, and dependent relative relief, are red herrings here). Now we have the complicating factor of the 90% and 10% ownership. As mother owned 10% of the property at her death, that 10% is uplifted to market value on her death. The 10% interest may be worth less than one tenth of the whole, depending on the documentation, and it would be best to get a RICS surveyor to value it for capital gains tax purposes.

Jeremy535897

I should add that if IHT is chargeable on mother's estate, then the probate value agreed for the 10% interest should be used for the CGT calculation. Unfortunately it may not need to be agreed for IHT if the RNRB applies.

jimmo

stevehamilton said:

 It was purchased with a Declaration of Trust . I owned 90 per cent of the flat , mum owned 10 per cent ( she died earlier this year ) , I now own the flat outright . 

Did the declaration of trust say anything about your mum being able to live in the flat?

If it did there is the possibility that you can claim private residence relief. Relief is due where the flat was occupied by the beneficiary of a trust.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65400

Jeremy535897

jimmo said:

stevehamilton said:

 It was purchased with a Declaration of Trust . I owned 90 per cent of the flat , mum owned 10 per cent ( she died earlier this year ) , I now own the flat outright . 

Did the declaration of trust say anything about your mum being able to live in the flat?

If it did there is the possibility that you can claim private residence relief. Relief is due where the flat was occupied by the beneficiary of a trust.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65400

I doubt there is a trust here. If there were a life interest trust for mother, son and mother would have bought the property as trustees for the trust. (It would also mean the entire property was part of her estate for inheritance tax, and there would be a capital gains tax free uplift on the property on her death.) That is incompatible with a 90% 10% split. All a declaration of trust means is that the owners declare they own it beneficially as to 90% and 10%. See https://www.simpsonmillar.co.uk/media/do-i-need-a-declaration-of-trust-uk/