CGT on a shared house sale

CEON44

House being sold for £75k is shared amongst 6 siblings. So about 12k each after fees.  As this is below threshold then should not be taxed? But issue may be the house was bought for 100k  in 6 siblings names about 20 years ago following parents divorce. So over time due to deterioration of the area there has been 25% loss. But as the 6 siblings didnt actually pay for the house in the first place is all the money counted as profit? Parents divorced, sold their home, mother moved away, bought smaller home in 6 childrens names but father lived in it with right of residence. Hes now passed away and property has been agreed sale.  

Jeremy535897

It sounds as if there was a trust involved. You need to check the paperwork as the trust only has one (smaller) annual exemption, but it should have a market value base cost.

CEON44

Jeremy535897 said:

It sounds as if there was a trust involved. You need to check the paperwork as the trust only has one (smaller) annual exemption, but it should have a market value base cost.

I dont believe there is a trust. As u I said this was set ip about 20 years ago. Parents were splitting and sold the marital home fir about £123k. The mother was moving away and was happy to sign over most of her share to 6 kids. Father also signed over his share and bought current property for 100k.  After fees the parents split the remaining 20k approx. All i know is the house was placed in 6 kids name with the father having something called a right of residency. Trust was never mentioned. 

Jeremy535897

A right of residency is very likely to involve a trust. I can't think how it would have any legal effect otherwise. Was the house included in father's estate for inheritance tax purposes when probate was granted?

CEON44

Jeremy535897 said:

A right of residency is very likely to involve a trust. I can't think how it would have any legal effect otherwise. Was the house included in father's estate for inheritance tax purposes when probate was granted?

I dont believe so. As the house was never in his name it wasnt part of his estate. At his death he basically had no property, money or anything of any value.  

macman

I'm struggling to understand how any property in the UK can have declined in value by 25% since 2002, unless it has been allowed to fall into a state of extreme disrepair?
Who has been paying for the maintenance and repair of the property?

CEON44

macman said:

I'm struggling to understand how any property in the UK can have declined in value by 25% since 2002, unless it has been allowed to fall into a state of extreme disrepair?
Who has been paying for the maintenance and repair of the property?

House is in Northern Ireland. Prices were flying way too high when it was bought. The 2008 crash hit the area badly and the house easily lost 50% value. Prices now recovered but the area has since deteriorated badly. Lucky to get rid at that price to be honest. 6 siblings kept the property decent but shithole area

p00hsticks

CEON44 said:

Jeremy535897 said:

A right of residency is very likely to involve a trust. I can't think how it would have any legal effect otherwise. Was the house included in father's estate for inheritance tax purposes when probate was granted?

I dont believe so. As the house was never in his name it wasnt part of his estate. At his death he basically had no property, money or anything of any value.  

I'm no expert and NI may be different but I was under the impression that you could only have a maximum of four named legal owners for a property unless it was done via a trust ? And as Jeremy says, the right of residence would also suggest that there there was a trust in place

Jeremy535897

CEON44 said:

Jeremy535897 said:

A right of residency is very likely to involve a trust. I can't think how it would have any legal effect otherwise. Was the house included in father's estate for inheritance tax purposes when probate was granted?

I dont believe so. As the house was never in his name it wasnt part of his estate. At his death he basically had no property, money or anything of any value.  

It may well have been part of his estate for inheritance tax purposes, but that won't matter, given the figures. The children's base cost should be the value when the property was bought in their names, but only if there is no trust, and I still don't understand where a right of residence comes from without a trust.

saajan_12

CGT is based on the market value at acquisition and disposal (unlike stamp duty). This is assumed to be equal to the purchase price and sale price respectively if these were arms length transactions, but if either was a gift, then you need to remember its acutally the value that you're trying to identify. 

So if they were gifted a property worth £100k and sell it for £75k, that would be a loss crystallised in the year of sale, and hence no CGT due. 

sheramber

What stipulates that father had right of residence?

What document is there  or where it is stated?