Worried about CGT on property mother signed over to me 18 years ago

[Deleted User]

Local_Lass said:

So even if I live in it and it becomes my primary residence I still can’t sell it for donkey’s years without still having some liability?  Eek! It’s the gift that keeps on giving ... or rather taking!   As I said earlier, as far as I’ve been told there was no valuation when it was transferred therefore I can’t work out the change in value.  My biggest concern is that because there was no value that I’d be liable for CGT on every penny of its sale value since there was no ‘cost price’ to deduct from that.  I guess my parents were very naive when they decide to do this and didn’t find out the long term consequences before going ahead.  Thanks for offering to try and calculate it, though!

Yes - I did get the impression that you believed you would avoid any CGT if you moved into the property. I didn’t want to dwell on the consequences of a decision that was not your making - what’s done is done! I guess that you will just have to accept that, for every £1 it increases in value, you will keep at least 72p.
Good Luck!

getmore4less

I have had another  scan but don't see mention of dads will 

Was there one, what did that say?

Keep_pedalling

You would not have to pay CGT on the entire value, you would need to get a valuation at the time of transfer from a chartered surveyor.

One other potential issue is what happens if anything happens to the house if you pre-decease your mother. Do you have a will that would cover this situation? If there is no life interest trust in place already your will should set one up for her in the event of your death.

[Deleted User]

Mickey666 said:

However, since seem to be mainly concerned with protecting your daughter's inheritance, I wonder if - at the appropriate time - the house could be transferred into your daughter's name, as it was transferred to you, presumably as a gift valued at the current market value.  As I understand things, there would be no CGT on such a transaction, although it would be subject to PET rules (basically, no tax to pay if you live for seven years after the gift).  At this point, daughter could either move into the house as her main residence, thereby not accruing any CGT liability on it, or simply immediately sell it, again with no CGT liability.

I'm not entirely sure about all that, but it might be worth further investigation.

Surely that would trigger an immediate liability to CGT? Value at second gift minus value at first gift?

Local_Lass

Ahhh, I didn’t know I could gift it to my daughter without any penalty.  If that is indeed possible then that’s a good basis for a conversation with her moving forward.  Hopefully we won’t need to move on that for a few years yet but at least I can make sure she isn’t caught in the same situation as me.  Thank you all so much for all your help, you’ve definitely given me some guidance for preparing for the future and I very much appreciate that.

[Deleted User]

Local_Lass said:

Ahhh, I didn’t know I could gift it to my daughter without any penalty.  If that is indeed possible then that’s a good basis for a conversation with her moving forward.  Hopefully we won’t need to move on that for a few years yet but at least I can make sure she isn’t caught in the same situation as me.  Thank you all so much for all your help, you’ve definitely given me some guidance for preparing for the future and I very much appreciate that.

Sorry - unless I have missed something, that would be a capital gains disposal - as if you sold it to your daughter - whether you received any consideration or not.

Jeremy535897

purdyoaten2 said:

Local_Lass said:

Ahhh, I didn’t know I could gift it to my daughter without any penalty.  If that is indeed possible then that’s a good basis for a conversation with her moving forward.  Hopefully we won’t need to move on that for a few years yet but at least I can make sure she isn’t caught in the same situation as me.  Thank you all so much for all your help, you’ve definitely given me some guidance for preparing for the future and I very much appreciate that.

Sorry - unless I have missed something, that would be a capital gains disposal - as if you sold it to your daughter - whether you received any consideration or not.

Of course it is, but as I said earlier, this thread suffers from an absence of hard facts, which means the responses are mere speculation. The ability to hold over capital gains on outright gifts of non-business assets to individuals was repealed with effect from 14 March 1989.

sheramber

 I wonder if - at the appropriate time - the house could be transferred into your daughter's name, as it was transferred to you, presumably as a gift valued at the current market value.  As I understand things, there would be no CGT on such a transaction, although it would be subject to PET rules (basically, no tax to pay if you live for seven years after the gift).  At this point, daughter could either move into the house as her main residence, thereby not accruing any CGT liability on it, or simply immediately sell it, again with no CGT liability.

Not correct    https://www.gov.uk/capital-gains-tax/what-you-pay-it-on
 You do not usually pay tax on gifts to your husband, wife, civil partner or a charity.
No  mention of daughter.

Whatever you decide to do you need to take professional advice to avoid similar problems in the future.

[Deleted User]

Jeremy535897 said:

purdyoaten2 said:

Local_Lass said:

Ahhh, I didn’t know I could gift it to my daughter without any penalty.  If that is indeed possible then that’s a good basis for a conversation with her moving forward.  Hopefully we won’t need to move on that for a few years yet but at least I can make sure she isn’t caught in the same situation as me.  Thank you all so much for all your help, you’ve definitely given me some guidance for preparing for the future and I very much appreciate that.

Sorry - unless I have missed something, that would be a capital gains disposal - as if you sold it to your daughter - whether you received any consideration or not.

Of course it is, but as I said earlier, this thread suffers from an absence of hard facts, which means the responses are mere speculation. The ability to hold over capital gains on outright gifts of non-business assets to individuals was repealed with effect from 14 March 1989.

I agree. However the op has expressed some level of stress as evidenced in the initial post and I did invite the lady to supply additional information on one occasion. It is clearly a difficult situation even though the sale/second transfer could be many years away. As you say, the absence of clarity limits responses somewhat.

Jeremy535897

[Deleted User] said:

Jeremy535897 said:

purdyoaten2 said:

Local_Lass said:

Ahhh, I didn’t know I could gift it to my daughter without any penalty.  If that is indeed possible then that’s a good basis for a conversation with her moving forward.  Hopefully we won’t need to move on that for a few years yet but at least I can make sure she isn’t caught in the same situation as me.  Thank you all so much for all your help, you’ve definitely given me some guidance for preparing for the future and I very much appreciate that.

Sorry - unless I have missed something, that would be a capital gains disposal - as if you sold it to your daughter - whether you received any consideration or not.

Of course it is, but as I said earlier, this thread suffers from an absence of hard facts, which means the responses are mere speculation. The ability to hold over capital gains on outright gifts of non-business assets to individuals was repealed with effect from 14 March 1989.

I agree. However the op has expressed some level of stress as evidenced in the initial post and I did invite the lady to supply additional information on one occasion. It is clearly a difficult situation even though the sale/second transfer could be many years away. As you say, the absence of clarity limits responses somewhat.

The only way to deal with the stress is to get to the facts, and as OP is the owner of the property, she should have the documentation that goes with ownership, or know who keeps it on her behalf. That is the starting point here.