What CGT to pay on property sale as joint tenants?

older_and_no_wiser

I’m hoping someone can help me to calculate what my CGT liability will be on a property I am selling. 

This was my parents property but I was on the title deeds as “joint tenant” with both my parents. However, they lived in the property and I didn’t.

The property was bought in 2014 (10 years ago) for £130,000 - myself and my parents as joint tenants. The move in costs (legal fees and estate agent) were around £3,000.

My mother passed away in 2018 (5 years ago). At that point, the property would have been valued at around £190,000 and it was then myself and my father listed as joint tenants. My father continued to live there.

My father passed away in December 2023 and I became sole owner via my father’s will. The property was valued at around £210,000 at that point.

I have just sold the property at £220,000. The fees for selling will be approx. £3,500.

I believe I have to pay the CGT within 30 days of completion. I just need to know what I have to pay. 

Thanks in advance if anyone can help calculate this amount as I’m completely stumped!

Keep_pedalling

It’s actually 60 days from completion it needs to be paid.

there will be no CGT to pay on your father’s 50% your original 1/3 share will subject to the full gain since 2014, and the 1/6th share you inherited from your mother will be subject to the gain since her death. You need the exact date of all these events to work out your taxable gain.

More_complicated_than_that

Keep_pedalling said:

there will be no CGT to pay on your father’s 50%.

Is that right? [£220,000 - (£210,000 + £3,500)] x 50% - £3,000 annual exemption = £250.

older_and_no_wiser

  Thanks for the replies. I'm still really confused though (sorry!). Just some sort of ballpark figure based on the dates I've given above would be great. When the time comes, I might just phone HMRC and ask for help working it out as it seems way too complex for me to calculate it. I just want to know roughly what I'm expected to pay; £2000? £5000? £10,000+?
Thanks!

Bookworm105

did you actually contribute towards any of the £3k purchase and move in costs or did your parents pay them from their own money? If they did then you cannot offset them now as they are not your costs/expenditure. if you did contribute then you can only claim your share, not the full 3,000.

as a joint tenant since original purchase of a property which has never been your main residence, your share of the gain(s) will be (*1 rounded figures for simplicity):
a) 1/3 (33.33%) from date of purchase 2014 = (220-130) x 1/3 = 30,000
b) an additional 1/6 (16.67% being half of mother's 1/3) from 2018 = (220-190) x 1/6 = 5,000
c) the final 1/2 (50%) from Dec 23. CGT is due on this as you have not lived in it. = (220-210) x 1/2 = 5,000

Net taxable gain (30+5+5) - 3,500 selling costs - 3,000 annual exemption  = 33,500 payable at either 18% and some or all of it at 24% depending on what tax bracket you fall in. You will need to work that out yourself, see here: Capital Gains Tax: what you pay it on, rates and allowances: Capital Gains Tax rates - GOV.UK (www.gov.uk)


you have 60 days from completion date of sale to report and pay the tax
Report and pay your Capital Gains Tax: If you sold a property in the UK on or after 6 April 2020 - GOV.UK (www.gov.uk)

*1 Note the calculations should be done in months, not years 

*2  I assume no inheritance tax was paid on either parental deaths, therefore HMRC have not yet accepted the  interim 190 & 210 valuations used in the above calculation. There are only 2 facts, purchase cost, selling price. The others are open to challenge and would depend on who did them for what purpose ("probate" valuations are typically on the low side so do not "help" when later faced with CGT) and what HMRC was told at the time.  HMRC have the right to use their own valuations if yours are too far off, you can then challenge HMRC back with your own valuation evidence.

older_and_no_wiser

Bookworm105 said:

did you actually contribute towards any of the £3k purchase and move in costs or did your parents pay them from their own money? If they did then you cannot offset them now as they are not your costs

as a joint tenant since original purchase of a property which has never been your main residence, your share of the gain(s) will be (*1 rounded figures for simplicity):
a) 1/3 (33.33%) from date of purchase 2014 = (220-130) x 1/3 = 30,000
b) an additional 1/6 (16.67% being half of mother's 1/3) from 2018 = (220-190) x 1/6 = 5,000
c) the final 1/2 (50%) from Dec 23. CGT is due on this as you have not lived in it. = (220-210) x 1/2 = 5,000

Net taxable gain (30+5+5) - 3,500 costs - 3,000 annual exemption  = 33,500 payable at either 18% and some or all of it at 24% depending on what tax bracket you fall in. You will need to work that out yourself, see here: Capital Gains Tax: what you pay it on, rates and allowances: Capital Gains Tax rates - GOV.UK (www.gov.uk)


you have 60 days from completion date of sale to report and pay the tax
Report and pay your Capital Gains Tax: If you sold a property in the UK on or after 6 April 2020 - GOV.UK (www.gov.uk)

*1 Note the calculations should be done in months, not years 

*2  I assume no inheritance tax was paid on either parental deaths, therefore HMRC have not yet accepted the  interim 190 & 210 valuations used in the above calculation. There are only 2 facts, purchase cost, selling price. The others are open to challenge and would depend on who did them for what purpose ("probate" valuations are typically on the low side so do not "help" when later faced with CGT) and what HMRC was told at the time.  HMRC have the right to use their own valuations if yours are too far off, you can then challenge HMRC back with your own valuation evidence.

Thanks so much for this. That seems a lot clearer now and a great starting point for me to work with.