Capital gains tax on house sale

Balmain

Hi,
not sure if this type of question has been asked before. 

In 2006 my sister owned a property that was lying empty and she was worried about being able to pay the mortgage on it. It was not in a rentable condition. She offered for me to take the property from her if I could pay the mortgage. The price for me was the outstanding sum on the mortgage. I wasn’t in a position to get a mortgage myself at that time but I could afford to pay the payments so I accepted the deal and moved in. Over the next 16.5 years I renovated the property and converted the attic and generally transformed the house. 

I decided to sell the house this year as it was bigger than we needed and wanted to downsize. There was a fair bit of equity built up in the house now.
The house was still in my sisters name although she hadn’t lived there for 17 years. I arranged to sell and my sister signed all the paperwork needed and explained to the lawyers that they should deal with me and that all proceeds from the sale were to be paid straight to me which all went well and that’s what happened. 

My question is, is there any way that my sister won’t have to pay capital gains tax on the sale? 

Technically she hasn’t made a penny on the sale. I have made money on the sale but it’s been my primary residence for the 16 years I lived there. 

I know it’s a weird situation but hoped someone with a bit of tax knowledge might be able to help?
sorry for long post.

km1500

If the property is in your sister's name then she will be liable on cgt on any increase in value from the time she bought it to the time she sells it

She will, of course, be able to deduct expenditure on improvement which will.eg include attic conversion  but not eg decoration.

Keep_pedalling

Your sister has the liability and the tax needs to be paid within 6 months of the sale. She obviously had no idea how to work out what the taxable gain is as you are the one who spent the money on the house, so you need to sit down together so you can help her sort this and hopefully you still have enough left from your downsize to cover her tax bill.

SDLT_Geek

km1500 said:

If the property is in your sister's name then she will be liable on cgt on any increase in value from the time she bought it to the time she sells it

She will, of course, be able to deduct expenditure on improvement which will.eg include attic conversion  but not eg decoration.

Is it right that she can deduct the cost of an improvement which she did not pay for?  OP paid for it.

km1500

yes she can

Keep_pedalling

SDLT_Geek said:

km1500 said:

If the property is in your sister's name then she will be liable on cgt on any increase in value from the time she bought it to the time she sells it

She will, of course, be able to deduct expenditure on improvement which will.eg include attic conversion  but not eg decoration.

Is it right that she can deduct the cost of an improvement which she did not pay for?  OP paid for it.

I am pretty sure she can, I have paid for work my children have done in their houses which I would class as a gift.

SDLT_Geek

Keep_pedalling said:

SDLT_Geek said:

km1500 said:

If the property is in your sister's name then she will be liable on cgt on any increase in value from the time she bought it to the time she sells it

She will, of course, be able to deduct expenditure on improvement which will.eg include attic conversion  but not eg decoration.

Is it right that she can deduct the cost of an improvement which she did not pay for?  OP paid for it.

I am pretty sure she can, I have paid for work my children have done in their houses which I would class as a gift.

Good news, and thank @keep_pedalling

propertyrental

Does CGT on a property have not to be declared / paid within 30 days of sale, not 6 months?

Or have I got that wrong?

diystarter7

propertyrental said:

Does CGT on a property have not to be declared / paid within 30 days of sale, not 6 months?

Or have I got that wrong?

Hi


https://www.litrg.org.uk/tax-guides/capital-gains-tax/capital-gains-tax-reporting

Very detailed and helpful

Thanks

theartfullodger

Keep_pedalling said:

Your sister has the liability and the tax needs to be paid within 6 months of the sale. 

Nope, declared and paid within 60 days of sale.

3card

theartfullodger said:

Keep_pedalling said:

Your sister has the liability and the tax needs to be paid within 6 months of the sale. 

Nope, declared and paid within 60 days of sale.

theartfullodger said:

Keep_pedalling said:

Your sister has the liability and the tax needs to be paid within 6 months of the sale. 

Nope, declared and paid within 60 days of sale.

I can confirm the 60 days.
We have just gone through this and our 60 day so up on the 7th Feb. We notified them and i will be paying our tax this week