Capital Gains Tax on a property that we could not sell

canaldumidi

So in the 80s, you received a gift that was worth, say, £50K and perhaps much less given there was a lease attached. Clearly this was of benefit to you, and was done, I imagine, to save you and/or your father costs in Inheritance Tax and/or care home fees.

The property is now worth, say, £500K, making you a huge profit.

I've no idea of the legal tax liability, but I know where the morally right answer is....

k12479

Bjstanbridge said:

...of course could not actually sell the property.

Why not? Properties with leases are sold all the time, particularly at auction.

GDB2222

canaldumidi said:

So in the 80s, you received a gift that was worth, say, £50K and perhaps much less given there was a lease attached. Clearly this was of benefit to you, and was done, I imagine, to save you and/or your father costs in Inheritance Tax and/or care home fees.

The property is now worth, say, £500K, making you a huge profit.

I've no idea of the legal tax liability, but I know where the morally right answer is....

With due respect, this is a tax question. Where do morals come in? I’m sure the OP will pay whatever tax is due, but it’s perfectly reasonable that he doesn’t want to pay more than he has to.

caprikid1

Sounds like you received bad advice in transferring the property to you in the first place, it probably would have been seen as deprivation of assets in the event of care hold fee's and the transaction unwound in the calculations. Instead you have a large Capital gains tax bill where one never existed.

Bjstanbridge

k12479 said:

Bjstanbridge said:

...of course could not actually sell the property.

Why not? Properties with leases are sold all the time, particularly at auction.

The reason was that the lease was for 50 years or until he passed away.

Slithery

caprikid1 said:

Sounds like you received bad advice in transferring the property to you in the first place, it probably would have been seen as deprivation of assets in the event of care hold fee's and the transaction unwound in the calculations. Instead you have a large Capital gains tax bill where one never existed.

The advice may well have been sound when the decision was made in the 80's.

GDB2222

caprikid1 said:

Sounds like you received bad advice in transferring the property to you in the first place, it probably would have been seen as deprivation of assets in the event of care hold fee's and the transaction unwound in the calculations. Instead you have a large Capital gains tax bill where one never existed.

I expect that IHT was the driver for this, rather than care home fees.