Capital Gains tax

callisto1275

My father gifted his "half " of the home my mother still lived in to me in 2004 ( they were divorced many years ago but he retained a share in the marital home to prevent mother doing equity release etc) Gift is beneficial joint tenants.

Mum died in August this year so the property reverted to me. 

When the house is sold is the capital gain calculated from the time it was bought by Mum and Dad (1975) to when it is sold  by me or, from when it came to me when mum died (Aug 2021)  and when it is sold?
Do I also have a CGT allowance to offset against any gain?
Any advice  or signposting to sources of inspiration gratefully received.

[Deleted User]

So - you have two calculations - one for each half.

1) The gift from your father. The gain is half sale price less less half sale costs less half value at the time of the gift less half cost of repairs.

2) Your mother’s half. The gain is half sale price less half sale costs less half of the value at the time of your mother’s death.

You do have an exemption of 12300. Any gain must be declared and tax paid within 30 days of sale. I presume that your Dad took care of any CGT payable at the time of the gift to you.

callisto1275

I have no knowledge of him doing anything re CGT at time of gifting. Would the solicitor dealing with the gift need to report any CGT due from him?

[Deleted User]

callisto1275 said:

I have no knowledge of him doing anything re CGT at time of gifting. Would the solicitor dealing with the gift need to report any CGT due from him?

It would not be entirely professional of me to suggest that, given that it happened seventeen years ago, to let sleeping dogs lie, but ….   

Keep_pedalling

callisto1275 said:

I have no knowledge of him doing anything re CGT at time of gifting. Would the solicitor dealing with the gift need to report any CGT due from him?

No, that would have been your father’s responsibility.

Jeremy535897

[Deleted User] said:

You and your father are connected persons for CGT. You should also know that there was a ‘rebasing’ on 31st March 1982 to the extent that any gains before that are eliminated. You must obtain a valuation of the property at that date. 

So - you have two calculations - one for each half.

1) The gift from your father. The gain is half sale price less half sale costs less half value at 31st March 1982 less half cost of repairs.

2) Your mother’s half. The gain is half sale price less half sale costs less half of the value at the time of your mother’s death.

You do have an exemption of 12300. Any gain must be declared and tax paid within 30 days of sale. I presume that your Dad took care of any CGT payable at the time of the gift to you.

Why isn't the half acquired from father valued at the date of gift in 2004, rather than 1982? Holdover relief on non-business assets gifted to individuals ended in March 1989.

[Deleted User]

Jeremy535897 said:

[Deleted User] said:

You and your father are connected persons for CGT. You should also know that there was a ‘rebasing’ on 31st March 1982 to the extent that any gains before that are eliminated. You must obtain a valuation of the property at that date. 

So - you have two calculations - one for each half.

1) The gift from your father. The gain is half sale price less half sale costs less half value at 31st March 1982 less half cost of repairs.

2) Your mother’s half. The gain is half sale price less half sale costs less half of the value at the time of your mother’s death.

You do have an exemption of 12300. Any gain must be declared and tax paid within 30 days of sale. I presume that your Dad took care of any CGT payable at the time of the gift to you.

Why isn't the half acquired from father valued at the date of gift in 2004, rather than 1982? Holdover relief on non-business assets gifted to individuals ended in March 1989.

I wasn’t considering holdover relief😊 I initially missed the 2004 until preparing my last post and you didn’t give me time to change it 🤔

Jeremy535897

[Deleted User] said:

Jeremy535897 said:

[Deleted User] said:

You and your father are connected persons for CGT. You should also know that there was a ‘rebasing’ on 31st March 1982 to the extent that any gains before that are eliminated. You must obtain a valuation of the property at that date. 

So - you have two calculations - one for each half.

1) The gift from your father. The gain is half sale price less half sale costs less half value at 31st March 1982 less half cost of repairs.

2) Your mother’s half. The gain is half sale price less half sale costs less half of the value at the time of your mother’s death.

You do have an exemption of 12300. Any gain must be declared and tax paid within 30 days of sale. I presume that your Dad took care of any CGT payable at the time of the gift to you.

Why isn't the half acquired from father valued at the date of gift in 2004, rather than 1982? Holdover relief on non-business assets gifted to individuals ended in March 1989.

I wasn’t considering holdover relief😊 I initially missed the 2004 until preparing my last post and you didn’t give me time to change it 🤔

I know the feeling! I should also have said I think you mean improvements rather than repairs.

[Deleted User]

Jeremy535897 said:

[Deleted User] said:

Jeremy535897 said:

[Deleted User] said:

You and your father are connected persons for CGT. You should also know that there was a ‘rebasing’ on 31st March 1982 to the extent that any gains before that are eliminated. You must obtain a valuation of the property at that date. 

So - you have two calculations - one for each half.

1) The gift from your father. The gain is half sale price less half sale costs less half value at 31st March 1982 less half cost of repairs.

2) Your mother’s half. The gain is half sale price less half sale costs less half of the value at the time of your mother’s death.

You do have an exemption of 12300. Any gain must be declared and tax paid within 30 days of sale. I presume that your Dad took care of any CGT payable at the time of the gift to you.

Why isn't the half acquired from father valued at the date of gift in 2004, rather than 1982? Holdover relief on non-business assets gifted to individuals ended in March 1989.

I wasn’t considering holdover relief😊 I initially missed the 2004 until preparing my last post and you didn’t give me time to change it 🤔

I know the feeling! I should also have said I think you mean improvements rather than repairs.

You think correctly.

callisto1275

Thank you for the advice and explanations.  How would you suggest I find the values required for the property in the years I need to consider? Apart from changing the central heating system and replacement windows my father made no improvements to the house and it is basically the same house as when it was built. The council put in a wet room and stair lift to help mum remain in her home but I think that makes it less attractive value wise.

Jeremy535897

Dealing with the additions first, to qualify for relief they have to be improvements (not just replacements) that are reflected in the value of the house when sold. Boilers and windows are unlikely to count as improvements, and you have ruled out the stair lift and wet room as items that enhance the value.

It can be very hard to obtain property values for dates in the past. In theory a chartered surveyor should be able to do this, but many don't choose to. If the property is, for example, in a street of similar properties, looking at the data on Zoopla or similar sites may give a rough guide, if similar properties were sold back in 2004.