Capital Gains Tax on gifted property - Help!

Petra_P

Hello members, I’m posting in the hope that someone can help with my complicated circumstances. My mum sold her home in 2002. Her solicitor was a family friend and as she’d become fixated on the idea that her home could be taken if she needed to go into hospital, she transferred the funds from her old house and bought the new one in my name. She moved into the new house and lived in it until her death last year. She left a very small amount of cash and no other assets so was under the probate threshold. Does anyone know whether I now have to pay capital gains tax? I had no benefit whatsoever from owning the house. The solicitor is now retired and living overseas so I can’t consult with him. I have the paperwork showing the transfer of monies from my mum so is this classed as a gift? Sorry to ramble but the house has just been sold and I’m unsure of my position. She lived for 22 years after this and never entered the care system. Thanks in advance for any advice or suggestions!

Keep_pedalling

Not only will you owe CGT on the increase in value since she purchased it but it also possible that her estate may have IHT to pay as this is classed as a gift with reservation of benefit. Do you know what she paid for it? How much did it sell for and what was her marital status? 

Sorry for questions but without those details it is impossible to say what you tax liabilities are.

I have also reported the post as bing on the wrong board, so a moderation can move it to the correct one.

Keep_pedalling

JamesRobinson48 said:

You haven't said if you intend to sell the house. Also, do you live in it?  Do you also own another property?

Do you know if your mum claimed any means-tested benefits?  

The OP says it is already sold.

km1500

as this is not your main home then cgt will be payable on the gain

the gain can be calculated by taking the purchase price and deducting it from the sale price. you are also allowed to deduct the cost of purchase which is solicitors fees, stamp duty etc and the cost of sale eg estate agents fees and solicitors fees 

you're also allowed to deduct any improvements but note these have to be improvements and not repairs 

the balance is your gain. There is a yearly allowance and the rest is added to your income of that year and a taxed accordingly. some may be at 20% and the rest may be at 40% depending on what your other income was and what the gain was

you don't say if you own any other property but if you don't then you might and I say might just be able to claim that that was your main residence but your mum was living there with you and therefore it would be cgt free but this is a bit outside my experience and I'm not sure what you would need to do to prove this.however if you already have a main home then this is irrelevant

Keep_pedalling

km1500 said:

as this is not your main home then cgt will be payable on the gain

the gain can be calculated by taking the purchase price and deducting it from the sale price. you are also allowed to deduct the cost of purchase which is solicitors fees, stamp duty etc and the cost of sale eg estate agents fees and solicitors fees 

you're also allowed to deduct any improvements but note these have to be improvements and not repairs 

the balance is your gain. There is a yearly allowance and the rest is added to your income of that year and a taxed accordingly. some may be at 20% and the rest may be at 40% depending on what your other income was and what the gain was

you don't say if you own any other property but if you don't then you might and I say might just be able to claim that that was your main residence but your mum was living there with you and therefore it would be cgt free but this is a bit outside my experience and I'm not sure what you would need to do to prove this.however if you already have a main home then this is irrelevant

You can’t claim a property is your main residence if you don’t live there. If the OPs rents then the rented property is the main residence.

Unfortunately the annual CGT allowance is now only £3000, which is unlikely to cove much of 22 years of gains.

Petra_P

Thanks for your replies. It seems that CGT will apply, less the (now very small) annual allowance and any improvements made. I’m married and have lived at the same address with my husband for the whole time so proving I’ve lived at the other property would be impossible. My husband owns our marital home so I was hopeful that everyone could own one property but this is not the case either, so it’s cheque book out I think! Thanks again for taking the time to reply.