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Council House Sale. Will I be liable for capital gains tax?
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mokell
Posts: 2 Newbie


Can some one help answer some questions regarding a council house sale ? I lived with my mum,we bought our council house together in 1989. I moved out in 1996 when I got married and I live in a different house/have a mortgage with husband. I was a tenants in common with my Mum and she sadly passed away recently and the house ownership has transferred to me. I am swithering whether to rent or sell the property. If I sell the property, will I be liable for capital gains tax? Thanks in advance
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Yes you will, but not on the period '89 to '96 when you were resident there. What proportion of the property did you own during that time? 50%?
It's not a council house sale, it ceased being a council house in '89.No free lunch, and no free laptop1 -
Maybe.Depends on the gain involved.* 1989: you joint purchased a property - 50%? It was your main residence so no CGT liability* 1996: you moved out. No longer yourmain residence so CGT liability kicks in on your (50%?). What was the exact value at that time?* 2020 (??). you inheritted your mother's 50%. CGT liability on 100% kicks in. What was the exact value at that time?* 2021 perhaps. You sell.You calculate the increase in value of your 50% from 1996 to date of sale, plus the additional 50% from date of inheritance to date of sale. If it exceeds the annual CGT allowance, you will pay CGT.
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Yes.
1989 to now is 31 years. 1996 to now is 24 years, 77% of the time you have owned your 50% of the property.
You will be liable to CGT on 77% of 50% of the gain, less your allowance.
If you leave it longer before sale, that proportion will increase, and you may become liable to CGT on the other 50%, too.
Do you want to run a residential lettings business? Will it be profitable? Can you separate the emotional attachment to "mum's house" from the property simply being a business asset?1 -
AdrianC said:Yes.
1989 to now is 31 years. 1996 to now is 24 years, 77% of the time you have owned your 50% of the property.
You will be liable to CGT on 77% of 50% of the gain, less your allowance.
If you leave it longer before sale, that proportion will increase, and you may become liable to CGT on the other 50%, too.
Do you want to run a residential lettings business? Will it be profitable? Can you separate the emotional attachment to "mum's house" from the property simply being a business asset?
But 1989 - 1996 it was the OP's main residence, therefor exempt.
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greatcrested said:AdrianC said:Yes.
1989 to now is 31 years. 1996 to now is 24 years, 77% of the time you have owned your 50% of the property.
You will be liable to CGT on 77% of 50% of the gain, less your allowance.
If you leave it longer before sale, that proportion will increase, and you may become liable to CGT on the other 50%, too.
Do you want to run a residential lettings business? Will it be profitable? Can you separate the emotional attachment to "mum's house" from the property simply being a business asset?
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The 50% liability is of course an assumption, without further info from the OP.No free lunch, and no free laptop0
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AdrianC said:
plus the residual gain on the (unconfirmed) % inherited "tenants in common with my Mum and she sadly passed away recently"1
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