Paying CGT on property parents lived in

[AnnieChance]

In August 2001, along with my mum and dad, I bought their house from the Northern Ireland Housing Executive. I paid the cash using redundancy money and mum and dad were entitled to 60% tenancy discount.
House valued £58,000
Tenancy discount £34,800
Price paid £23,200
My parents continued to live in the house and in 2003, my sister, who was suffering from a mental illness and dependant on them, moved in with them. In October 2011 - my dad died and in June 2014 – mum developed dementia and moved into nursing home until her death in November 2015
My sister continued to live in the house until she moved to sheltered accommodation in October 2016.
At no time did I receive any ‘rent’ for the property.
In May 2016 – I added my husband’s name as owner of the property.
I have now sold the property for £109,000 and would be grateful for any help regarding the amount of Capital Gains tax I need to pay. What amount is considered profit and do any of these factors influence that amount?
Also, how do I pay this - do I wait until my next tax return or is there a specific form I should complete now?
Thanks in anticipation

[darthblingbling]

It would probably be the sale price minus the cost price (what you and the NI executive paid) minus any capital costs or expenses that may be allowable, split 50:50 between you and your husband assuming there's no defined split in the legal ownership. You may need to check the terms and conditions with the discount you received as some authorities will ask that this is paid back to them if you later sell the property.

No relief would be available as you never lived in the property.

Gain would be declared on your 2017/18 return and the tax would be due Jan 31st 2019.

[darthblingbling]

https://www.nihe.gov.uk/index/advice/bu ... operty.htm

This may not have been in play in 2001 so may not be accurate, but I would speak to them first to make sure you know the facts before you do anything with the money or work out your actual gain.

[AnnieChance]

Thank you for your reply. My parents received the discount because of the length of time they had lived in the property as tenants. As the house was bought outright and not part of equity sharing, and it was 16 years ago, the housing executive are not involved.
So, am I right in my understanding that it doesn’t matter: -
• how long I have owned the house,
• that I did not benefit from owning it during that time,
• that I had a dependant relative living in it –
If that’s true then I believe I have to pay 18% on half of the profit, since my husband now jointly owns house with me . What I can’t work out now is what my starting figure would be. Is it £58000, the value of the house at the time of purchase, £23,200, the amount I paid for the house or is it a third of either of those two figures because although I paid the money, I actually owned the house with both of my parents!
Also, because I ‘gifted ‘ my husband half of the house when it was worth £109000, and it was worth £109000 when it was sold, does that mean he does not owe any CGT on his half as he is not making a profit?
Apologies if this all sounds daft – I’m just trying to get my head round things!!

[Peter D]

It is not clear in who's name the house was in at time of purchase. Regards Peter

[AnnieChance]

Sorry , I didn't make that clear. Mum, dad and myself bought the property as joint tenants meaning that their share automatically passed to me when they died.

[maths]

Assuming you, mother/father on purchase each acquired a beneficial interest as joint tenants then you would each own 1/3rd with a base cost for each of you of 1/3rd of actual price paid.

On the death of father you/mother would each acquire 50% of his 1/3rd at then market value. On mother's death you again would inherit her 50% at its then market value. You would then own 100% with a base cost which will be the aggregate of the acquisition costs.

On sale of the 100% there will be no CGT reliefs and CGT will be payable on the gain made.