CGT on Property

Bobbydue

Hi, i'm selling an ex council house and will be liable to CGT.

I purchased the house in 2001 and received a large discount from the council, when completing the CGC calculator on the HMRC website, it asked me about the value of the house on purchasing it.

My question is how can I get a valuation of market value in 2001?

Thanks for your help.  

[Deleted User]

Did you live in it at any time?

Bobbydue

[Deleted User] said:

Did you live in it at any time?

Unfortunately not

Bobbydue

Well, I did as a kid, but not when I purchased it.


Just looking at old files back to 2001,  I did live there but not for long a matter of months

Jeremy535897

Your base cost for capital gains tax when you are not connected with the seller is normally what you paid, not what it was worth. You have to show that the transaction was not at arm's length to substitute market value.

Even if you could substitute market value, that value would have to take account of the obligation to repay all or part of the discount if the property was sold within the relevant period.

If you did not live in it when you bought it, why did you have the right to buy it?

Bobbydue

The problem is, myself and then joint owning mother received discount at the time of purchase, the CGT calculator asked if you purchase for less than market value

"Did you buy the property for less than it was worth because the seller wanted to help you"

Which I assume is yes, it then asked how much was market value? Which I'm struggling to find, or is this incorrect?

Jeremy535897

The seller did not want to help you. It was obliged to sell by the Government.

If you acquired part of the property from your mother later on, you should value that part at its market value at the date your mother sold or transferred it to you.

Bobbydue

Jeremy535897 said:

The seller did not want to help you. It was obliged to sell by the Government.

If you acquired part of the property from your mother later on, you should value that part at its market value at the date your mother sold or transferred it to you.

Thank you, so it was what we paid, not the discount that was received?

Just a correction on above, I spent last night going through old records, I did live there at the time the application took about 2 year, I did stay with my girlfriend up north while settling into a new job which became a permanent move some months after the purchase was finalised. 

Jeremy535897

Yes, it is the amount paid, although there is nothing definitive I can point to. If the property was your main residence for any period of time that you owned it, then you can treat that period as exempt, plus the last 9 months of ownership. There is a useful helpsheet on sales of property here, although it relates to the tax year just ended:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2021

Bobbydue

Jeremy535897 said:

Yes, it is the amount paid, although there is nothing definitive I can point to. If the property was your main residence for any period of time that you owned it, then you can treat that period as exempt, plus the last 9 months of ownership. There is a useful helpsheet on sales of property here, although it relates to the tax year just ended:
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2021

Thank you very much for taking the time to help me.