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Where Taxpayers and Advisers Meet

capital gains

doctoppo
Posts:16
Joined:Sun May 16, 2010 6:57 am
capital gains

Postby doctoppo » Fri Feb 16, 2018 8:11 am

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.

someone
Posts:691
Joined:Mon Feb 13, 2017 10:09 am

Re: capital gains

Postby someone » Fri Feb 16, 2018 10:42 am

Why ask the same question twice?

Assuming that the beneficial interest was in your name then the transfer to your wife affected nothing and CGT is due from the 1989 value. (no CGT on transfers between husband and wife)

If the beneficial interest was your mothers then the gift to you will have been at market value. No CGT due because of PPR. So CGT due on gain since 1997.

(modulo special rules because the transactions were so long ago that I don't know about)

Assuming you are selling after death, the house will have been part of her estate if she gave it to you in 1997 due to reservation of benefit. So the treatment for IHT should agree with the treatment for CGT, whichever one it is. If it was never hers then it cannot be part of her estate.

doctoppo
Posts:16
Joined:Sun May 16, 2010 6:57 am

Re: capital gains

Postby doctoppo » Sun Feb 18, 2018 9:41 am

Thank you Someone for your reply its very helpful.


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