Value of gift when given for CGT purposes

by **rebeccaraisin** on Fri Jan 20, 2012 9:03 pm

Hi everyone,

I apologise if this has been asked previously, but I couldn't find anything similar when I searched.

In 1999 my grandparents gave their house to their four children, split equally between them.

One of my aunts died a few years later, at which point her share returned to my grandma, as her next of kin. Now that my grandma has died, my mum aunt and uncle are looking to sell.

They cannot find written down anywhere the market value of the house at the time of the gift however.

Could anyone please enlighten me as to how to at least get a rough estimate as to how the house will be valued for CGT purposes?

Thanks in advance,

Rebecca

by **Peter D** on Fri Jan 20, 2012 9:39 pm

Why did it return to the Grandma. Was the gift conditional. Regards Peter

by **rebeccaraisin** on Fri Jan 20, 2012 10:50 pm

My Aunt didn't leave a will, was divorced, with no children, so everything transferred to my Grandma as her next of kin.

by **King_Maker** on Sat Jan 21, 2012 9:10 am

I assume the 1999 transfer did give rise to any CGT liability? If it did, HMRC and/or solictors should have a record of the Market Value.

If not, I suggest you engage a professional valuer to obtain its Market Value in 1999.

Probate Value will also be needed.

I assume the house has been rented out for the past 12 years?

by **pqtaxation** on Sat Jan 21, 2012 12:14 pm

rebeccaraisin wrote: Now that my grandma has died, my mum, aunt and uncle are looking to sell.

Peter D wrote:Why did it return to the Grandma? Was the gift conditional?

King_Maker wrote: I assume the 1999 transfer did give rise to any CGT liability? If it did, HMRC and/or solicitors should have a record of the Market Value.

If not, I suggest you engage a professional valuer to obtain its Market Value in 1999.
Probate Value will also be needed.

I assume the house has been rented out for the past 12 years?

My reading of OP is that Grandma resided in the property (presumably on her own after Grandpa pre-deceased her) till she died recently but Rebecca could confirm my reading of her OP.

Not clear what Peter D meant by “conditional” – was it whether Grandma continued to live there?

Re CGT on future sale of house, does the answer to King_Maker’s question about whether property was rented out for last 12 years make any difference to the CGT liability? Whether it was let (as he assumed) or was not (as I read the OP), the base cost of Grandma’s one quarter interest re-inherited from deceased, intestate aunt would be uplifted to market value at time of Grandma’s death (TCGA 1992 s62) and the base cost of the three interests of one quarter each would be at their 1999 market valuation which could be quantified per King_Maker’s suggestions.

Re Grandma’s IHT, if she resided there she reserved benefit. Her half (presuming she and Grandpa owned the house 50/50 in 1999) of the three quarter-interests gifted in 1999 would be aggregated at time of her death with her death estate as would have Grandpa’s at the time of his death.

by **rebeccaraisin** on Sat Jan 21, 2012 6:51 pm

Thanks for your replies.

Yes she continued to live there rent free, so there's no doubt that it would be classed as a gift with reservation for IHT purposes, however house value is c225k and other assets total around 25k max, so well within the Nil band.

There was no CGT liability on the initial transfer no, as it was my grandparents primary residence.