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Where Taxpayers and Advisers Meet

CGT and IHT

birdsong
Posts:14
Joined:Sun Dec 21, 2014 12:07 pm
CGT and IHT

Postby birdsong » Fri Apr 28, 2017 10:35 am

We have recently downsized by moving into a smaller property that we have owned for over 20 years. It had been rented out since purchase and we had never previously lived in it.

1) To what extent will our occupation now mitigate the considerable capital gains, should we ever need to sell?

2) Our wills leave the property to our children. At what point will we qualify for the added IHT exemption accorded to those who leave their home to children or grandchildren?

3) We have been informed that any extra IHT exemption would be limited to the market value of our property.

Thanks in advance for any guidance

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: CGT and IHT

Postby AGoodman » Fri Apr 28, 2017 2:41 pm

1. It is roughly proportionate so if you manage to live there for 20 years, the relief will cover half the gain.
2. If you have moved in then it will qualify.
3. Correct - the cap is currently £100k per individual, increasing to £175,000 on 6 April 2020, but you need to have a property interest of that value.

If your current home is worth less than £350,000 then all may not be lost. If you sold your former home after 15 July 2015 then the value of that home may be available to allow you to claim the full residential nil rate band (under downsizing relief).


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