Capital gains related property question

[mikearwas]

Say, for example, two brothers inherited half of a house following the death of their grandfather. Said grandfathers widow (not grandmother) has resided in the house since death of grandfather.

Widows family now wish to sell the property and use the proceeds from their 50% to pay for nursing homes. Their part ownership of this property is the only property in the two brothers names and they have rented accommodation and not lived in said property.

As no other property is owned would said property qualify as two brothers primary residence?

Many thanks

[mikearwas]

loafer123 said:

Not if they never lived there.

How long would one have to live there to qualify?

[mikearwas]

deckster said:

Bear in mind that CGT will only be payable on the uplift in value between when they inherited, and the value at sale. Minus their £11k (each) CGT allowance.

On 25% of a house, I suspect the CGT liability will be pretty small in any case.

That would be the case if it wasn't a 4 bed in house in a nice area of North London. Current calculated CGT is approaching new M3 money (across our 50% stake) , which hurts.

[mikearwas]

uknick said:

There is a possibility to avoid the CGT if you can prove to HMRC you never had beneficial ownership of the property.

This will require writing to HMRC asking for dispensation. On the details given here it is not clear whether it would be granted.

But, as said, first look at the possible taxable gain to see whether it's worth the bother of arguing with HMRC

Thank you very much - that's exactly the kind of thing I was looking for. Can you provide any more details?