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Dont understand Capital Gains Tax on houses!
Charlylovesphil_2
Posts: 1 Newbie
Hi All,
This is my first post so be nice! My Dad very kindly brought me & my hubby a house 6 years ago but he put it in his name instead of mine, now we have 2 children & have to move out of our lovely but small home. I assumed you only had to pay tax on profit you made for example this house was brought for £125 k 6 years ago & is now worth 210k the houses we are looking at are roughly in the 180k region in a different county so will Dad have to pay on the £30,000 profit or the £85,000 profit even tho he is swapping for a different house? He is now worried he wont have enough money to buy the house we want & we are getting confused!
Also if he gave it to my mum would they still be liable?
Many thanks in advance for your help!
Charlotte
This is my first post so be nice! My Dad very kindly brought me & my hubby a house 6 years ago but he put it in his name instead of mine, now we have 2 children & have to move out of our lovely but small home. I assumed you only had to pay tax on profit you made for example this house was brought for £125 k 6 years ago & is now worth 210k the houses we are looking at are roughly in the 180k region in a different county so will Dad have to pay on the £30,000 profit or the £85,000 profit even tho he is swapping for a different house? He is now worried he wont have enough money to buy the house we want & we are getting confused!
Also if he gave it to my mum would they still be liable?
Many thanks in advance for your help!
Charlotte
0
Comments
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The CGT is due on £85k, since what house he buys next is immaterial.
Wait until April and pay only 18% CGT on the increase in value. Alternatively, do a quick calculation using taper relief to see how much CGT is due now. I doubt it would be less than 18%.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Everyone gets a tax-free allowance of £9200 (gets increased every year usually) against any capital gains. Your dad could give half the house to his wife before it gets sold. That way the gain of £85K is split in two, and each gain gets the £9200 allowance knocked off. So instead of tax on £75,800 (£85K less £9.2K) it'll be tax on £66,600 (£85K less twice £9,200)0
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