Capital Gains Tax

Mintyrose

I’m wondering if anyone can advise/ has experience of this situation please? 

My sibling lives at my parent’s house, I live in social housing, when parent passes, as it stands the home is left 50/50 with a caveat of 2 years for sibling to decide wether they want to sell or buy me out, which in turn gets me on the housing ladder potentially.  As sibling lives in the house I’m guessing they don’t have to pay CGT? But as I don’t and I’m making money I’m guessing I do? At the moment I am on national insurance credits as I am a carer, and obviously I don’t currently pay tax , but husband does on his NMW job, can anyone clarify for me please? Thanks so much 

p00hsticks

If the house increases in value in the period between your parent's passing and the time your brother decides to sell or buy you out, then as I understand it, under current rules you would potentially be liable to pay CGT on half of the rise in value during those two years or so. 

Mintyrose

p00hsticks said:

If the house increases in value in the period between your parent's passing and the time your brother decides to sell or buy you out, then as I understand it, under current rules you would potentially be liable to pay CGT on half of the rise in value during those two years or so. 

Thanks for the info  p00hsticks ! 

poppystar

p00hsticks said:

If the house increases in value in the period between your parent's passing and the time your brother decides to sell or buy you out, then as I understand it, under current rules you would potentially be liable to pay CGT on half of the rise in value during those two years or so. 

Except as the Will gives the brother two years in which OP can’t force a sale would any increase in that period leave her liable for CGT? I’m not sure but doesn’t that make it like an IPDI trust, albeit one of short duration? Or, if the house isn’t transferred into joint names does it remain as an asset of the estate for that period and the estate pay any CGT that might become due? 

Also OP, CGT is only payable on any increase in value so the question would be whether that is likely to happen - it may not. Ditto if your brother buys you out at the date of death value it wouldn’t. 

Your income is irrelevant as is your husbands because the tax is not linked to your income as it is a capital gains tax. 

mattojgb

Mintyrose said:

...But as I don’t and I’m making money I’m guessing I do? At the moment I am on national insurance credits as I am a carer, and obviously I don’t currently pay tax , but husband does on his NMW job, can anyone clarify for me please? Thanks so much 

CGT on property is currently levied at 24% for basic rate taxpayers and 28% for higher rate taxpayers. There is also currently an allowance of £3000 and you can discount 9 months ownership. A lot of this is speculated to change in the budget.

Keep_pedalling

mattojgb said:

Mintyrose said:

...But as I don’t and I’m making money I’m guessing I do? At the moment I am on national insurance credits as I am a carer, and obviously I don’t currently pay tax , but husband does on his NMW job, can anyone clarify for me please? Thanks so much 

CGT on property is currently levied at 24% for basic rate taxpayers and 28% for higher rate taxpayers. There is also currently an allowance of £3000 and you can discount 9 months ownership. A lot of this is speculated to change in the budget.

The 9 months Ionly applies if you have ever lived in the property during your ownership.