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Avoiding capital gains tax on 2nd house

edited 30 November -1 at 1:00AM in Cutting Tax
4 replies 713 views
Jim-in-BristolJim-in-Bristol Forumite
1 posts
edited 30 November -1 at 1:00AM in Cutting Tax
My farther sign over the family home to my three brothers and I in 1996 once he paid the mortgage. The property is now rented out in order to fund my mums nursing care.
I part own my current home with my fianc!e (soon to be husband) and my name is on the land registry, however, he pays the mortgage. My question is there any way to avoid capital gains tax when the time comes to sell my mum and dads house?

Replies

  • kidmugsykidmugsy Forumite
    12.6K posts
    Hung up my suit!
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    Do you mean that your father gifted his house to his four children while his wife was still alive? Did any of the four children live in it after the gift, as their principal private residence? I take it that your father is now dead? If so, when did he die?
    Free the dunston one next time too.
  • edited 10 August 2018 at 7:57AM
    00ec2500ec25 PPR
    9.1K posts
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    edited 10 August 2018 at 7:57AM
    the fact you part own and that your fianc! pays the mortgage on the property you live in is utterly irrelevant

    the facts are you own a share of a property which is not your main home.

    the motives as to why father signed over that property to you, and what happened to it before your mother went into care are important.

    on the face of what you say so far there is no legal way you can avoid being liable for CGT when it sells.

    depending on your more detailed answers (and your willingness to engage in creating some "old" paperwork) you may be able to show that you were never a beneficial owner of the property, and therefore have no liability whatsoever for CGT on its sale.
    But if you think you can avoid CGT and still collect the cash from the share of the sale into your own personal bank account then you will be so wrong you'd better get to know some really good lawyers as you will need them
  • purdyoaten2purdyoaten2 Forumite
    1.2K posts
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    I suspect that the op is trying the 'this is the only house that I own because my partner pays the mortgage on the house that I currently live in' route and looking to explore PPR.

    On another point, has the income from property been declared by all four siblings?
  • xylophonexylophone Forumite
    34.1K posts
    Part of the Furniture 10,000 Posts Name Dropper
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    Your father was the sole owner of the family home and he gave it to his four children in 1996? Presumably all four children were aged over 18 at that point.

    Were any of you living in the house at that point? If so, when did you move out?


    Did your father continue to live in the property without paying rent to the new owners? If so, this was a gift with reservation of benefit and so ineffective from the point of view of IHT.

    Your father has died? If so, presumably the IHT position was sorted out at the time.

    Presumably your mother continued to live in the property with the owners' permission.

    You say that the house is being rented out by the current owners (you and your siblings) and that (in effect), you are giving the rent money to your mother so that she can pay her care home bills.

    Are you and your siblings declaring your rental income to HMRC?

    Your PPR is the house which you own with your fiance - when you and your siblings come to sell the property gifted to you by your father in 1996, you will need to calculate what CGT may be due.
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