Tax of Sale of Mums House

Bobbydue

Hi,
My mums house was jointly owned by myself and Mum as joint tenants, which meant when she died I automatically inherited her half.
My question is about Tax on selling, i didn't live there and it is not my main home, I have a property elsewhere.

So, if i sell, I believe I will need to pay capital gains tax on my half, less allowances etc.

But, do I need to pay capital gains on the half I automatically inherited, or does her half sit as part of her estate and therefore I will be able to Inherit and pay no tax as its below her inheritance tax threshold.

thanks for your help. 

  

Jeremy535897

When your mother died, you became the sole owner of the house. When you sell it, you will pay capital gains tax on the sale proceeds, less the following:

• selling costs (legal fees and estate agent commission etc)
• the cost of the half you originally owned plus acquisition costs
• the market value at the date your mother died of her half
• any improvements (not repairs) that you paid for during the time you owned part or all of the property

You now have to declare and pay any tax due within 30 days of completion. See
https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

Bobbydue

Jeremy535897 said:

When your mother died, you became the sole owner of the house. When you sell it, you will pay capital gains tax on the sale proceeds, less the following:

• selling costs (legal fees and estate agent commission etc)
• the cost of the half you originally owned plus acquisition costs
• the market value at the date your mother died of her half
• any improvements (not repairs) that you paid for during the time you owned part or all of the property

You now have to declare and pay any tax due within 30 days of completion. See

Thank you for taking the time to reply.

Bobbydue

Jeremy535897 said:

When your mother died, you became the sole owner of the house. When you sell it, you will pay capital gains tax on the sale proceeds, less the following:

• selling costs (legal fees and estate agent commission etc)
• the cost of the half you originally owned plus acquisition costs
• the market value at the date your mother died of her half
• any improvements (not repairs) that you paid for during the time you owned part or all of the property

You now have to declare and pay any tax due within 30 days of completion. 

Hi, 
One last question that has come up, I lived at this house as my main home when I first purchased the house with my Mum as joint tenants some 19 years ago. a few years later I moved away to be closer to work and later moved in with my partner.

With the resent death of my Mother, and me now becoming sole owner, can I now nominate the house as my main residence for CG purposes?

 Thank you.

Jeremy535897

If the property was your main residence 19 years ago, the capital gain on the property will be reduced by the main residence exemption. If you occupied it for, say, 5 years as your main residence, and sold it after 20 years of ownership, 69 months out of 240 would be regarded as exempt (actual occupation plus last 9 months). You will receive that exemption without having to nominate the house as your main residence now.

You may find HS283 helpful, but note the latest version is for 2019/20, and since then the final 18 month exempt period has been reduced to 9 months, and the rules about paying tax 30 days after completion have been introduced. See:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2020

Bobbydue

Following on from above, I have now sold the house and paid the appropriate CG Tax.

My mother was in a care home and her fee's were covered by income.

I have now been approached with some outstanding costs.

My question is as we held the property as " joint tenants " which automatically transferred to me on my mothers passing, am I liable to pay this outstanding bill, there was no lean put on the property before my mothers passing.

And as far as I'm aware my mum had no estate or will.

Thanks for taking the time to read

xylophone

Presumably there was no lien put on the property your mother half owned and occupied because she was in a position to pay her fees from income.

What exactly are these costs which your mother appears to have incurred?

Your mother died intestate but it is not true to say that she had no estate.

Her interest in the property was definitely part of her estate as was any other cash or real assets that she owned at death.

Bobbydue

Pls close thread