Selling late fathers house tax implications

smithers1981

My father passed away in November leaving my Mum as joint tenant his house.

mum and dad been divorced over 30 years and have not lived together in that time.

dad wanted his 3 kids to have house and mum is happy to pass on proceeds of sale.

would any capital gains tax be due as mum has her own house? 

canaldumidi

Mum is now the sole owner.

She can therefore sell if she wishes, and she can then gift the proceeds to the kids if she wishes.

The gift to kids would be subject to the 7 year rule forInheritance Tax in the event that mum dies.

As (I assume) mum has not be living in the home as her main residence, Capital Gains Tax may be due on the 50% ownership from 30 years ago.

getmore4less

Are you sure the joint tenancy was not severed,  it can happen but the land registry not get updated.

example might be after the divorse settlement or they made new wills leaving their shares independently.


When did mum stop using the property.

smithers1981

Hi still u able to find definitive answer on this, mum has now ‘inherited’ property as joint tenant confirmed by solicitor.

As dad always lived alone in the property and mum hasn’t in last 30 years it’s really unclear as to wether cgt is due or not.

can anyone point me in right direction thanks.

bump.

theartfullodger

Sorry for your loss.

I suspect CGT will be due.  If so it needs to be both declared and paid within 60 days of sale: Is a sale planned? I strongly suggest mum talks to an accountant specialising in CGT & property.

(I've recently sold a property requiring CGT declaration & payment within 60 days).

If she chooses to delay sale for some time in the hope that CGT will reduce, that may be a good strategy.  However Bre**it & Covid have to be paid for and I'm expecting taxes, particularly CGT, to go up. Whatever is done it will be a gamble.

dimbo61

So your Mum now owns a property she wants to sell and pass on the proceeds to her 3 childrens.
There must have been a reason why  Dad put Mum on the deeds ?
She has a Capital Gains allowance of £12,300 on her 50%
Dad,s 50% won't have any CGT to pay.
I hope that the property has increased greatly in the last 30 years.
Speak to a solicitor about the best way to do this in the most Tax efficient way

canaldumidi

What date did dad die and mum inherit?

What was the declared probate value of the property on date of death? (A)

What is the expected sale price? (B)

Given that the property is (I understand) not the main residence of the now-owner, when it is sold CGT will be due on the difference in value between A & B (subject to CGT alowances).