Capital Gains Tax

af77
af77 Posts: 6 Forumite
Fourth Anniversary First Post
Hi all, 
We have some funds from selling my dads house he is still with us but house was is in mine and my brothers name, we have a company set up to use the money to buy some flats to rent out but due to the morgage rates going up we may just put in a high interest account in the name of the company. The issue is we want to make sure we wont pay capital gains taxs as we havnt gained anything yet just reinvesting 
Can anyone give me some advise please 

Comments

  • Keep_pedalling
    Keep_pedalling Posts: 20,028 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    edited 4 July 2023 at 5:37PM
    Are you saying that they has been no gain in the value of you father’s home in the period of your ownership? 

    Did your father ever own it? If he did then IHT is a potential issue even if it was transferred to you over 7 years ago, as is deliberate deprivation of assets in the case of needing residential care.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Eighth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 4 July 2023 at 5:43PM
    af77 said:
    Hi all, 
    We have some funds from selling my dads house he is still with us but house was is in mine and my brothers name, we have a company set up to use the money to buy some flats to rent out but due to the morgage rates going up we may just put in a high interest account in the name of the company. The issue is we want to make sure we wont pay capital gains taxs as we havnt gained anything yet just reinvesting 
    Can anyone give me some advise please 
    There will be a gain for each of you based on: Sale Proceeds less value at time of transfer (if transferred from him, otherwise what you both paid for it) less costs of sale (and purchase) less improvement costs. 


  • Jeremy535897
    Jeremy535897 Posts: 10,699 Forumite
    10,000 Posts Fifth Anniversary Photogenic Name Dropper
    Are you saying that they has been no gain in the value of you father’s home in the period of your ownership? 

    Did your father ever own it? If he did then IHT is a potential issue even if it was transferred to you over 7 years ago, as is deliberate deprivation of assets in the case of needing residential care.
    They have to show some intent at the date of transfer. they can't just assume deprivation rules apply. Age Concern does a very good study of the rules.
  • af77
    af77 Posts: 6 Forumite
    Fourth Anniversary First Post
    Are you saying that they has been no gain in the value of you father’s home in the period of your ownership? 

    Did your father ever own it? If he did then IHT is a potential issue even if it was transferred to you over 7 years ago, as is deliberate deprivation of assets in the case of needing residential care.
    He did own it but it was then placed in a trust 
  • Keep_pedalling
    Keep_pedalling Posts: 20,028 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    af77 said:
    Are you saying that they has been no gain in the value of you father’s home in the period of your ownership? 

    Did your father ever own it? If he did then IHT is a potential issue even if it was transferred to you over 7 years ago, as is deliberate deprivation of assets in the case of needing residential care.
    He did own it but it was then placed in a trust 
    So surely that money belongs to the trust not you? The trust will also be subject to CGT on the increase in value between the the value at the time of transfer and the sale price.

    The IHT 7 year rule will only apply to the transfer from the date the house was no longer his residential home. In addition if the trust was set up before 6th April 2017 his estate will not be able to claim the RNRB.
  • sheramber
    sheramber Posts: 21,520 Forumite
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Surely the money you wish to invest in an account is the gain on selling the property.

    Investing it doesn't cancel CGT on the profit when selling.
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