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Where Taxpayers and Advisers Meet

Tranfer of Deeds Error... CGT ??

alex-leics
Posts:4
Joined:Wed Aug 06, 2008 3:49 pm

Postby alex-leics » Mon Feb 19, 2007 11:48 am

Appreciate assistance on my predicamentÂ… A bombshell recently dropped about CGT. Â… I had no idea !! Basicaly :-

May 1994 .. Parent purchased property for £24,000, although not habitable.

Jan 2000 .. Agreed to purchase property from parent for £33,000, agreed to transfer deeds when payment completed.

April 2001 .. Invested in the region of 20k making property habitable (Only have receipts for in the region of 10k), moved in .. all bills in my name. At this point a lump sum payment made, followed by payments of £500 almost every month until April 2006 by which time the full £33,000 had been paid (No interest). This was done by cheque so can be verified.

Feb 2007 .. Property now worth £120,000


No written agreement was made, just verbal.. after all it was from my mother.
She herself does not own another property, but has never lived in this property as she herself is living with and caring for her elderly parents.

Only “proof” of the sale is a thank you in my wedding speech of 3 years ago which is on DVD.

1) Would CGT be liable on transfer of property to me ? If so roughly how much ?? CGT aside could a transfer still pose any other IHT or tax problems ??
2) If CGT is liable, what effect would my mother nominating this as her PPR for a period of 1 year have ??? Anything else that could be done to reduce ?
3) What is the best way forward (Solicitor, accountantÂ…..????)

Many thanks in advance for any comments.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Postby Peter D » Mon Feb 19, 2007 12:08 pm

What date did the property go into your name. Regards Peter

alex-leics
Posts:4
Joined:Wed Aug 06, 2008 3:49 pm

Postby alex-leics » Mon Feb 19, 2007 12:41 pm

Peter, this is the problem... to date I have not transferred into my name. My mother still owns property. If we had transferred deeds at time of agreement, this would have been April 2001.

alex-leics
Posts:4
Joined:Wed Aug 06, 2008 3:49 pm

Postby alex-leics » Mon Feb 19, 2007 12:46 pm

Sorry.. date we agreed to purchse was Jan 2000... property needed a lot of work, and we moved into property on April 2001. Apologies.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Postby Peter D » Tue Feb 20, 2007 12:38 am

We at the moment this looks like you were renting the property all that time so a CGT liability will be against your Mum and if she can claim the 10K you have spent as enhancement and say £3000 she may have a CGT of between £11,000 and £18,000 depending on her income. I would you suggest you get all the facts together and approach a well verse property lawyer face tot face and see if he may be able to assist but at present you are not the legal owner of the asset and your Mum is. Regards Peter

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Tue Feb 20, 2007 5:48 am

I am not sure I agree with Peter. It could be argued that you became the beneficial in 2000. As Peter says it may be best to get an opinion from an expert who is given all the facts.

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Tue Feb 20, 2007 5:50 am

And by the way I would suggest going to an accountant/tax advisor. Some solicitors also do tax but they are a little rare.

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Tue Feb 20, 2007 6:23 am

I tend to favour CDavey's position - i.e. you may have become beneficial owner in January 2000.

If so, you mother may have a CGT liability on the gift, depending on the exact circumstances.

However, your gain is either totally exempt (using Extra Statutory Concession D49), or a nil CGT liability after some PPR exemption, Taper Relief and Annual Exemption.

Have you read the Inland Revenue's Help Sheet IR283 which deals with CGT for private residences?

It is downloadable from their website.

http://www.hmrc.gov.uk/helpsheets/ir283.pdf


[Opinions in these forums are not meant to be a substitute for PROFESSIONAL ADVICE.]

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Postby Peter D » Tue Feb 20, 2007 7:03 am

This why I pointed out the potential costs if he they do not go and get some profession advise and as you say you he may have become the beneficial owner in Jan 2000 but they will need all the information, exact dates and payments to allow a well versed professional to draw up the case. Regards Peter

alex-leics
Posts:4
Joined:Wed Aug 06, 2008 3:49 pm

Postby alex-leics » Tue Feb 20, 2007 3:39 pm

Thanks to all 3 of you for your kind responses, you have put my mind at rest.

I had read IR283 numerous times, and other articles on the hmrc and taxationweb website, but due to my situation was it was not clear how this related to me.

Currently gathering the facts, and then will look for a tax account for professional advice.

Many thanks once again.


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