CGT on flat sale

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Bookworm105 said:

Tesremos969 said:

sheramber said:

mother then gifted me her half as inheritance in Oct 2018.
was it inheritance after she died or was it a gift given in her  lifetime?

In her lifetime. With a view to have passed it to me at least 7 years before her death. 

ok, but that does not absolve her from her own CGT liability upon "disposal" of an asset she owned. Disposal is not just selling, it also includes gifting.

The fact she gifted it to her son makes that a "connected person" transaction
CG14580 - Connected persons - HMRC internal manual - GOV.UK (www.gov.uk)
Therefore mother would be liable for CGT in her own name on her 50% share of the gain (less the usual costs and her CGT allowance of course) between her original purchase cost and its market value in Oct 18.
CG12920 - Gifts and Capital Gains Tax: introduction - HMRC internal manual - GOV.UK (www.gov.uk)
Do I need to pay Capital Gains Tax if I gift property? – TaxScouts
The fact she got zero money from you because it was a gift is irrelevant for CGT purposes and she has no exemption from CGT on what was an investment property she never lived in.

You are however correct that if she lives until Nov 2025 (7 years from date of gift) it will be outside her estate for IHT purposes when she dies.

Therefore you cannot complete your CGT until you have a figure for the Oct 18 value.
if you are genuinely selling it this month you need to get a move on finding that out. You have to submit and pay your CGT within 60 days of the sale completion date.

The obvious issue, of course, when submitting the form and, ultimately, the tax return is why a value at Oct 18 was required to calculate the chargeable gain. The explanation will report the disposal by Mum which will cause problems.  

Professional help in how to mitigate any repercussions should be sought. 

Tesremos969

Bookworm105 said:

Tesremos969 said:

sheramber said:

mother then gifted me her half as inheritance in Oct 2018.
was it inheritance after she died or was it a gift given in her  lifetime?

In her lifetime. With a view to have passed it to me at least 7 years before her death. 

ok, but that does not absolve her from her own CGT liability upon "disposal" of an asset she owned. Disposal is not just selling, it also includes gifting.

The fact she gifted it to her son makes that a "connected person" transaction

Therefore mother would be liable for CGT in her own name on her 50% share of the gain (less the usual costs and her CGT allowance of course) between her original purchase cost and its market value in Oct 18.

The fact she got zero money from you because it was a gift is irrelevant for CGT purposes and she has no exemption from CGT on what was an investment property she never lived in.

You are however correct that if she lives until Nov 2025 (7 years from date of gift) it will be outside her estate for IHT purposes when she dies.

Therefore you cannot complete your CGT until you have a figure for the Oct 18 value.
if you are genuinely selling it this month you need to get a move on finding that out. You have to submit and pay your CGT within 60 days of the sale completion date.

Thank you, obviously a bad oversight on our part not sort out her CGT then…
Yes I have genuinely sold the property, hence needing to sort this matter out and asking this forum for help.
I believe that almost all the increase in value of the flat would have happened by 2018. Since then prices have been mostly stagnant. At first I hoped that would mean that because I was living there for almost all that time, I would therefore be exempt as it was my main home. Please forgive me not knowing about this, I’m not very savvy with tax matters and accounting.