Capital gains tax

MDCD

Hi, my mother transferred her property (our family home) to myself and my siblings by ‘Love Favour and affection’ at no financial cost.  She has now decided she wants to move house.  My siblings and I wish to sell the property.  Can someone advise please if Capital Gains Tax (CGT) is paid on the profit made from the date the property transferred to us or from the date my mother purchased the property. Since the date of transfer my siblings and I have maintained the property and renovated it.  Do the renovation costs factor in to the amount of CGT?
My sister lived in the property for nine months, after having to leave her own property due to domestic violence, is she exempt from CGT?

Bookworm225

as connected persons mother transferred ownership to her children under the market value rule. If the property was not valued at that date then you will need to get a valuation done retrospectively and be prepared to defend the figure if HMRC queries it.
Each owner therefore calculates their CGT gain using that value as their "acquisition" (purchase) cost
CG14560 - Transactions between connected persons - HMRC internal manual - GOV.UK


sister appears to have lived in the property as her main (only) home whilst owner of it - that will be a "matter of fact" (note*). Therefore sister will be allowed to claim private residence relief for the number of days it was her home as a % of her overall ownership period (in days). That may mean 100% relief or a few £ which will probably be covered by her personal CGT allowance of £3k.

(*) You mention "leaving her own property" - if she is a co-owner of that then she is now liable for CGT on her share of it when she sells it as the facts will show she stopped living there and moved into another property she simultaneously owned)

all other owners face full gain less their own individual personal CGT allowance

"renovation costs" are unlikely to be capital costs and much more likely to be revenue maintenance costs and therefore disallowed for CGT purposes. In crude terms, to be a capital cost the work has to create something that did not exist before, renovating an existing something back to a "good" condition is not capital work, nor is a lick of paint prior to selling. If you want to argue you will need to give examples of the actual work done.

saajan_12

MDCD said:

Hi, my mother transferred her property (our family home) to myself and my siblings by ‘Love Favour and affection’ at no financial cost.  She has now decided she wants to move house.  

Why on earth did she do that? If she's still living there, its a gift with reservation so the value is still in her estate for that time. All that's happened is the kids would now be liable for CGT. 

MDCD said:

My siblings and I wish to sell the property.  Can someone advise please if Capital Gains Tax (CGT) is paid on the profit made from the date the property transferred to us or from the date my mother purchased the property. Since the date of transfer my siblings and I have maintained the property and renovated it.  Do the renovation costs factor in to the amount of CGT?

Its from the date of the transfer, but you'd need a basis for a valuation as of that date, since she didn't sell it to you at market value.
The works depends on what it was - capital improvement is deductible, renovating and replacing old for new of hte same thing is not.

MDCD said:

My sister lived in the property for nine months, after having to leave her own property due to domestic violence, is she exempt from CGT?

How many of you? You each calculate CGT on your respective shares.
Unless sister has lived there ever since her name was added, she isn't exempt but she gets some relief. Sister would calculate the number of months she lived there (plus the last 9 months) as a % of the total number of months she has owned it. That % is multiplied by the gain for her share of the property, then she'd deduct the £3k allowance (if she hasnt' already used it elsewhere) and pay CGT on the rest. 

Nomunnofun1

May one enquire as to who would be purchasing Mum’s new property?

Keep_pedalling

Giving your own home away is nearly always a very bad idea. As this was a gift with reservation of benefit the house still forms a part of her estate for IHT purposes and if she gave it away before April 2015 her estate will have lost the ability to claim the residential NRB so could subject to a significant IHT penalty. 

If she has the means to buy a new place without using any of the capital released from her current home then that would solve any problem about not being able to claim the RNRB, and it would also start the 7 year clock on the original gift.