Capital Gains Tax

lily_nelmes

Hello!! My Mothers House Was Transfered By Deed Of Gift To Myself And My Brother In 1991, My Mother Remained In The House As A Leaseholder .
Her Death In August Means The House Has Now Been Sold,my Brother And I Own Our Own Houses So Are We Subject To Capital Gains Tax?? All Help Would Be Appreciated.

fengirl_2

If it has never been the only or main residence of you or your brother, then yes, you will have CGT to pay on the differnece between the sale price and the price on transfer, less taper relief and your annual exemption.

lily_nelmes

hi! no we have never lived there just our mum as we both have our own houses so does this change anything? sorry to be a pain!!

silvercar

you will have a CGT liability based on the difference between its sale price and its value in 1991. Its value in 1991 will be less than the market value because you had a tenant (your mother) living in the property.

takoo

Hi lily nelmes

If your mother paid the market rent during the leasehold (a periodic tenancy I presume) I believe that you will be liable for CGT when you dispose of it on: the net proceeds of sale (sale price less costs of sale)
Less costs of less any improvements
Less market value at the date of gift

brownviking

Nine years ago we purchased a second home which we has been rented out.
We now need to sell it, no mortgage involved, but we are not sure how much CGT we will pay on selling. We are aware it is the difference between the price we bought it for and the price we sell it for but not sure how the latest budget altered things. Can anyone advise please, thanks

silvercar

If you exchange contracts after 5 April, you will be liable for 18% of the difference between the selling price and the buying price, less costs and less any upgrades. You could also utilise your CGT allowance.

If you sell earlier, you would be able to use taper relief based on how long you have owned the property (35% for 9 years) but would pay tax at your marginal rate.