Discussion
Hi all, could someone help me with a question please?
Parents family home signed over to me in name in 2010
Parents (one now) very much alive still lives in the house, no mortgage due or rent paid to me.
Said parent now dies (in example) and house is valued under gift with reservation limit for IHT (house value 150k)
I then sell my current home to move into inherited house, and for example I sell my current home 10+ years for £150000 (this was all bought and paid for for by me)
Will I have to pay CGT on any part of the inherited home or the sale of my then current home?
I though CGT only came when you sold a house.
Any help, knowledge or experiences would be great before I seek further professional advice.
I have been googling but all the CGT questions are for where someone wants to sell an inherited house. I dont, this one has more bedrooms.
This was parents idea in 2009 to pass the house to me and was drafted in a solicitors office. Sadly due to loss of one knowledgeable parent, the other cannot remember much about it
Parents family home signed over to me in name in 2010
Parents (one now) very much alive still lives in the house, no mortgage due or rent paid to me.
Said parent now dies (in example) and house is valued under gift with reservation limit for IHT (house value 150k)
I then sell my current home to move into inherited house, and for example I sell my current home 10+ years for £150000 (this was all bought and paid for for by me)
Will I have to pay CGT on any part of the inherited home or the sale of my then current home?
I though CGT only came when you sold a house.
Any help, knowledge or experiences would be great before I seek further professional advice.
I have been googling but all the CGT questions are for where someone wants to sell an inherited house. I dont, this one has more bedrooms.
This was parents idea in 2009 to pass the house to me and was drafted in a solicitors office. Sadly due to loss of one knowledgeable parent, the other cannot remember much about it
The house will form part of your parents' estate when they die, so in effect, the transfer of ownership is 'ignored' by IHT rules.
The transfer of the house to you will have been deemed to have taken place at market value at the time. You won't pay CGT on your current house when you sell it (primary residence relief), but you will have to pay CGT on your parents' house when you sell it in the future as it was not your primary residence for the full time that you owned it (subject to any reliefs).
Basically this is / was a bad thing to do, because rather than just get caught by IHT or CGT tax, you are now caught by both.
The transfer of the house to you will have been deemed to have taken place at market value at the time. You won't pay CGT on your current house when you sell it (primary residence relief), but you will have to pay CGT on your parents' house when you sell it in the future as it was not your primary residence for the full time that you owned it (subject to any reliefs).
Basically this is / was a bad thing to do, because rather than just get caught by IHT or CGT tax, you are now caught by both.
Ok thank you Charles that is most helpful and helps clear up. All the other forum replies implied that I got a large CGT bill when simply receiving the house.
I originally thought I get hit for CGT when I inherited the house to live in. The plan is to never sell i.e I move in and live there until my days are up, I hope then to pass to my daughter but I fully appreciate that I will need to pay something and will be prepared. Its just that a big sum like that has to be considered as I'm planning my required pot for retirement as the sale of my current home was to be a large part of that.
The house value is low about £150,000 for the inherited house so may but too low for IHT, hopefully.
I will still seek professional advice so I can go through a few scenarios but that has been very helpful.
My mum bless has been worried by my worry as she honestly thought that she was doing a good thing. I've told her not to worry, she has and still is doing a great thing!
I originally thought I get hit for CGT when I inherited the house to live in. The plan is to never sell i.e I move in and live there until my days are up, I hope then to pass to my daughter but I fully appreciate that I will need to pay something and will be prepared. Its just that a big sum like that has to be considered as I'm planning my required pot for retirement as the sale of my current home was to be a large part of that.
The house value is low about £150,000 for the inherited house so may but too low for IHT, hopefully.
I will still seek professional advice so I can go through a few scenarios but that has been very helpful.
My mum bless has been worried by my worry as she honestly thought that she was doing a good thing. I've told her not to worry, she has and still is doing a great thing!
Mr Pointy said:
You might not get hit for CGT when transferring the house but what about Stamp Duty? If it's applcable it should have been paid within 14 days of the transfer.
Why would there been Stamp Duty on a gifted property?https://www.gov.uk/guidance/sdlt-transferring-owne...
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