property tax

[doctoppo]

I am in the process of selling a house which was purchased in 1989 and would like some advice regarding capital gains tax, my mother lived in the local authority house and i provided the funds to purchase it in her name to gain the right to buy discount,she has always lived there rent free, I had a deed of trust drawn up at the same time which i presume is deposited with the land registry, i still have the original document and the deed states that i provided the funds, ( my wife's name is not on the deed although a letter from the solicitor says that we both provided the funds ) in 1997 the property was transferred into my name and my wife's names as tenants in common, i will be obtaining a professional valuation of the property for 1997 for our joint liability but what about from 1989 to 1997, Is it free of tax due to the property being registered in my mothers name, or do i have a liability due to the trust deed being in my name, I will be grateful for any advice that can be offered.

[bd6759]

What did the deed of trust say?

[doctoppo]

Thanks for your reply bd6759,

The deed states,(In a shortened version)

The within mentioned purchase price was provided by (myself) and the within property was conveyed to my mother merely as a trustee for the said (myself)
My mum also declares that she holds the property in trust for me in fee simple and hereby agrees at my cost to convey the said property to such person or persons at such time and in such manner or otherwise deal with the same as the said (myself) shall direct or appoint.

[bd6759]

You have owned the property since 1989.

The transfer of a half share to your wife has the general effect if giving her a half share at half your original cost. The capital gain is simply the difference between the 1989 purchase price and the selling preice, split equally between yourself an your wife.

There are no reliefs available.

[doctoppo]

Thank you very much for your reply if i can divide the profit between my wife & myself that will be good, is it possible to submit the capital gain calculation to the inland revenue for agreement before submitting self assessment tax return?

[bd6759]

It is called self assessment for a reason.

HMRC might talk you through the calculation, but will be unable to agree it.

[doctoppo]

Thank you very much for all the information.