Minimising Capital Gains

[nivearose]

Hi there,

I have been reading your website with great interest.

I am trying to help my mother to find the most tax efficient way of disposing of a property she owns.

She bought the flat with her ex-husband around 1989 for my grandmother to live in and pay rent from the council to them. They divorced 13 years ago and the property was put solely into my mother's name.

My grandmother lived in the property until 8 years ago. Since then, the property has been privately rented.

My mother has never lived in the property and owns another one which she lives in.

She now needs to sell this flat that she rents, as she has no income except the maintenance her ex-husband pays her. She is unable to work due to ill heath and has not worked for over 2 years. Previously, she was earning around 11K a year.

She is prepared to leave her property empty and live in the flat for a while if that means she doesn't have to pay capital gains tax. She has also mentioned gifting it to me if she can get round it that way.

Can you let me know how long she would have to be resident in the flat to avoid paying capital gains tax or if there is any way around the tax? What is the best way to minimise her exposure?

Many thanks for your help in advance.

Best wishes

[pawncob]

Making it her PPR will not reduce the gain, except for the additional 18 months of PPR granted. If she lived there for a year it would only reduce it by 30/324 or so.

It's too late for tax planning.