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Capital Gains Tax
Hi,
I purchased an ex council property in 2000 when it was valued at £57,500 for my MiL.
Property was gifted to me 2015. No valuation was carried out. A neighbouring property was sold for £135,000.
I re-mortgaged property 2024, when it was valued in excess of £120,000.
I have sold property for £90,000.
Am I liable for CGT?
Ride hard or stay home :iloveyou:
Comments
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Hello missile, you may find out guidance on Capital Gains tax useful to help work out whether or not you have a tax liability on the disposal of the property.
Link: Capital gains tax | Low Incomes Tax Reform Group
You may also find this gov.uk page helpful if you require HMRC to agree to your property valuation
Link: Post transaction valuation checks for Capital Gains (CG34) - GOV.UK
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Who actually purchased the house in 2000? Presumingly it was your MIL not you in which case CGT would be based on the 2015 value.
Who did you sell it to? If it was sold to a connected person at a discounted price then CGT is based on full market value not the amount you sold it for.
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When you say you purchased an ex-council house for your MIL, does this mean she bought it in her name and you only provided the funds?
Or, did you buy it and then gift it to her completing the relevant transfer of ownership paperwork?
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Presumably you have never resided in the property ?
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Bought in my MiL's name, I paid for it.
A neighbouring property was sold for £135,000 in 2015. Would HMRC accept that as value?
It was sold to an investor, who has no connection to me. Property prices have fallen in my local and I wanted a quick sale. 3 off estate agents valued property at £100, 110 and 130,000
"A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
she bought it in her name and I provided the funds.
"A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
Correct. I have never lived in the property.
"A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
From the info you have given it seems you have sold for less than the value at the point you were gifted the property, so no CGT due.
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That was my understanding, many thanks for your confirmation. I do not need to report sale to HMRC "If you’re a UK resident, you do not need to report your gains online if your total gains are less than the tax-free allowance."
"A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0
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