Capital gain tax help
Comments
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Sorry for that, it would not allow me to create a new thread for some reason!
There were no legal instructions in place, so therefore my father's share would pass over to my mother automatically I assume. Who defines the share as well? because as far as I'm concerned, although it is joint ownership I do not have a share as such, because the house is now my mother's.
How would I start to inform HMRC, or would I have to wait until it is sold?0 -
Property bought for parents - do I have to pay CGT
First of all I have to say that its great that forums like this exist and it is great that there are people out there willing to help others.
I bought a property for my mum and dad under my own name back in 2004. Concurrently I owned another property. As they are getting older I now want to move them closer to me - I now realise that I have to pay CGT on one of these properties because I can only nominate one as my main residence. Considering the house was lived in by mum and dad is it possible for one of them to declare it as their main residence so that I can use all the money for the next purchase?0 -
Property bought for parents - do I have to pay CGT
First of all I have to say that its great that forums like this exist and it is great that there are people out there willing to help others.
I bought a property for my mum and dad under my own name back in 2004. Concurrently I owned another property. As they are getting older I now want to move them closer to me - I now realise that I have to pay CGT on one of these properties because I can only nominate one as my main residence. Considering the house was lived in by mum and dad is it possible for one of them to declare it as their main residence so that I can use all the money for the next purchase?
Main residence or not it is not their property. Ironically you would have been totally exempt if you had done exactly as you did prior to 1988 but I am afraid that you will be liable for CGT without any reliefs other than the annual exemption. Hindsight is wonderful but, giving them the money to buy the property would have been the correct thing to do in this instance in order to avoid CGT although the IHT position (yours and theirs) would have played a major part in this decision.0 -
Thank you purdyoaten2 for your kind reply.
It is a pity but I guess they are the rules.
Another thought - Do you think I may have an option to offset some of the liability with my wife? I was not married the time of the purchase but when I sell it I will be - so could I gift it to her as she is not working and is lower rate tax payer?0 -
you could but equally HMRC have the power to ignore such a transfer if the only reason it was done was to reduce a tax liabilityThank you purdyoaten2 for your kind reply.
It is a pity but I guess they are the rules.
Another thought - Do you think I may have an option to offset some of the liability with my wife? I was not married the time of the purchase but when I sell it I will be - so could I gift it to her as she is not working and is lower rate tax payer?
you would need to make your wife a co owner a very considerable time before the property even begins to be marketed for sale in order to reduce that risk. At least a year plus as a start point, but longer would be better.
So the question is how soon do you need to sell?0
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