Passed in laws house in BIL name.

Metallicace

Thanks all, we really don't know the actual reasons this was done, my BIL was the golden child and they listened to whatever he said. My mum has been talking about doing the same, I said it's not worth even thinking about 

MarzipanCrumble

So the parents were living in the B-I-L's house.  Capital Gains is straight forward if the house is sold but how do HMRC 'know' the parents were living 'for free', if they were, in the house?  Especially if the asset was owned by B-i-L?

RAS

They've got access to death certificates, tax and electoral roll data, possibly pensions data, all detailing parent's address, and can see when the house was transferred to BIL. Not exactly rocket science.

Expect to pay the taxes plus a large penalty when they catch up, even if it's years later.

tls123

If it’s brother in laws house and he chooses to sell it I’m not sure why your worried about the CGT surely it’s his problem based on his position if he owns other properties. The house as it’s in his name doesn’t form part of the parents estate.

p00hsticks

tls123 said:

If it’s brother in laws house and he chooses to sell it I’m not sure why your worried about the CGT surely it’s his problem based on his position if he owns other properties.

I think the OP views it a a problem because the BIL has agreed to split the proceeds between all the children (he has no legal obligation to do so, but presumably this was agreed when the parents gifted the property to him), but is intending to deduct any CGT due first - so the higher the CGT bill , the less they all get. 

sheramber

how do we work out exactly what CGT we've to pay

That infers that the OP thinks the siblings each pay CGT.

The CGT is your BIL ‘s cost and only one exemption of £3000 is allowable.
The siblings have no responsibility  for CGT, which paid on the sale , not the acquisition.

The selling price less the sale costs should be shared equally.

BIL pays the CGT due out of his share.

Alternatively, if you all want to share the cost then you share out the balance left  after paying the CGT but that is a private agreement by the parties concerned. 

bobster2

sheramber said:

how do we work out exactly what CGT we've to pay

That infers that the OP thinks the siblings each pay CGT.

The CGT is your BIL ‘s cost and only one exemption of £3000 is allowable.
The siblings have no responsibility  for CGT, which paid on the sale , not the acquisition.

The selling price less the sale costs should be shared equally.

BIL pays the CGT due out of his share.

Alternatively, if you all want to share the cost then you share out the balance left  after paying the CGT but that is a private agreement by the parties concerned. 

BIL doesn't need anyone's agreement to follow this last course of action.

BIL owns the house. BIL is liable for CGT. If BIL wants to sell the house, pay the CGT then distribute the balance equally among the 3 of them - it's entirely up to him.

sheramber

Ebobster2 said:

sheramber said:

how do we work out exactly what CGT we've to pay

That infers that the OP thinks the siblings each pay CGT.

The CGT is your BIL ‘s cost and only one exemption of £3000 is allowable.
The siblings have no responsibility  for CGT, which paid on the sale , not the acquisition.

The selling price less the sale costs should be shared equally.

BIL pays the CGT due out of his share.

Alternatively, if you all want to share the cost then you share out the balance left  after paying the CGT but that is a private agreement by the parties concerned. 

BIL doesn't need anyone's agreement to follow this last course of action.

BIL owns the house. BIL is liable for CGT. If BIL wants to sell the house, pay the CGT then distribute the balance equally among the 3 of them - it's entirely up to him.

Precisely, but the other siblings might not agree with that arrangement leading to a family feud.

There is no legal requirement for him to do so

tls123

OP should be glad he has agreed to split the proceeds as he has no legal obligation to do. If the house is only just sold then OP needs only to wait for BIL to split the proceeds. 

Keep_pedalling

bobster2 said:

Ysheramber said:

how do we work out exactly what CGT we've to pay

That infers that the OP thinks the siblings each pay CGT.

The CGT is your BIL ‘s cost and only one exemption of £3000 is allowable.
The siblings have no responsibility  for CGT, which paid on the sale , not the acquisition.

The selling price less the sale costs should be shared equally.

BIL pays the CGT due out of his share.

Alternatively, if you all want to share the cost then you share out the balance left  after paying the CGT but that is a private agreement by the parties concerned. 

BIL doesn't need anyone's agreement to follow this last course of action.

BIL owns the house. BIL is liable for CGT. If BIL wants to sell the house, pay the CGT then distribute the balance equally among the 3 of them - it's entirely up to him.

And if he does this the amount he gifts to his siblings is classed as a gift, so will remain part of his estate for IHT purposes for the next 7 years.