Discussion
Pistonhead finance experts, can someone help me with the following?
Back in the 2000's my father put me on the deeds of his previous house, split three ways between myself, my Mum and himself. My Mum then died, so deeds were then split 50/50. My Dad then moved house to a new property which cost £200k to purchase.
He's now gone into an old people's home and we are preparing to sell the property for around the £300k mark. My question is, will I have to pay CGT on my entire half of the property value i.e. £150k (as it isn't my main residence) or only my half of the appreciation from £200 to £300k?
Thanks in advance!
Back in the 2000's my father put me on the deeds of his previous house, split three ways between myself, my Mum and himself. My Mum then died, so deeds were then split 50/50. My Dad then moved house to a new property which cost £200k to purchase.
He's now gone into an old people's home and we are preparing to sell the property for around the £300k mark. My question is, will I have to pay CGT on my entire half of the property value i.e. £150k (as it isn't my main residence) or only my half of the appreciation from £200 to £300k?
Thanks in advance!
"Put me on the deeds" doesn't really have any meaning.
Was there a "Deed of Gift" describing what was being to to whom and when?
Even if there was a Deed of Gift, these days "gifts with retention of benefit" are often ineffective (i.e. ignored) both in terms of HMRC (taxation) and local authorities (social care). That's broadly speaking unless as part owner of the property you then received payment of a market rent from the person living in it. You'd be well advised to find a solicitor or other professional who's fully up to speed with these matters and get proper advice a.s.a.p.
amongst other things, if you want to argue there was an effective gift then yes, you'll definitely be eligible to pay some CGT on the proportion(s) you owned during the periods you had such ownership. If the gift was ineffective then presumably CGT would not apply. Again, proper advice from a paid professional recommended.
Where CGT is payable on a property sale the tax must be declared and paid within 60 days so you don't want to trip over this point.
Was there a "Deed of Gift" describing what was being to to whom and when?
Even if there was a Deed of Gift, these days "gifts with retention of benefit" are often ineffective (i.e. ignored) both in terms of HMRC (taxation) and local authorities (social care). That's broadly speaking unless as part owner of the property you then received payment of a market rent from the person living in it. You'd be well advised to find a solicitor or other professional who's fully up to speed with these matters and get proper advice a.s.a.p.
amongst other things, if you want to argue there was an effective gift then yes, you'll definitely be eligible to pay some CGT on the proportion(s) you owned during the periods you had such ownership. If the gift was ineffective then presumably CGT would not apply. Again, proper advice from a paid professional recommended.
Where CGT is payable on a property sale the tax must be declared and paid within 60 days so you don't want to trip over this point.
Most of what you need to know is on the HMRC website, it's worth reading around that thoroughly before talking to a pro, to be sure you've considered all angles.
It may not be a given that your share of the house is 50%.How is it documented?
If your Dad inherited Mum's share, you have 1/3?
Can you in fact apportion joint ownership how you like and change it to suit you?
You might ideally own the fraction which gives you a CGT bill of a few shillings....
You could consider nominating the house as your main home for some of the time, this would reduce your CGT bill there, at the risk of creating a CGT bill on your own home. But there is scope there, because any potentially taxable gain on your house will be realised in a different tax year and have a fresh allowance.
Are you married? Can you use partner's CGT allowance?
The best way forwards may involve guessing what tax rates will do in future.
I used to know what I needed to know at the time, that's a while back, so treat what I've said as 'stuff for you to research'.
What would a Tory MP do?
Presumably owning a share of his house is for IHT and care fee reasons? If Dad's not being renting your share from you, that may not wash anyway.
It may not be a given that your share of the house is 50%.How is it documented?
If your Dad inherited Mum's share, you have 1/3?
Can you in fact apportion joint ownership how you like and change it to suit you?
You might ideally own the fraction which gives you a CGT bill of a few shillings....
You could consider nominating the house as your main home for some of the time, this would reduce your CGT bill there, at the risk of creating a CGT bill on your own home. But there is scope there, because any potentially taxable gain on your house will be realised in a different tax year and have a fresh allowance.
Are you married? Can you use partner's CGT allowance?
The best way forwards may involve guessing what tax rates will do in future.
I used to know what I needed to know at the time, that's a while back, so treat what I've said as 'stuff for you to research'.
What would a Tory MP do?
Presumably owning a share of his house is for IHT and care fee reasons? If Dad's not being renting your share from you, that may not wash anyway.
If it helps, I believe it was a 'Deed of Gift' - we are both shown as joint owners on the current property if you search on the Land Registry site.
The original three-way split of the previous property was 20 plus years ago with the new property being purchased 10+ years ago. My Dad has only gone into a care home in the last six months and - unless he lives to well over 90 (unlikely given he has heart failure) - the funds from the house sale won't be required to fund his care home fees (certainly not my 50% anyway).
My reading of the HMRC website is that I'm liable for 50% of the gain from 200k to 300k less the £12.3k CGT allowance. I am married, so can see there might be an option to use the Wife's allowance, but not overly stressed about that.
The original three-way split of the previous property was 20 plus years ago with the new property being purchased 10+ years ago. My Dad has only gone into a care home in the last six months and - unless he lives to well over 90 (unlikely given he has heart failure) - the funds from the house sale won't be required to fund his care home fees (certainly not my 50% anyway).
My reading of the HMRC website is that I'm liable for 50% of the gain from 200k to 300k less the £12.3k CGT allowance. I am married, so can see there might be an option to use the Wife's allowance, but not overly stressed about that.
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