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Where Taxpayers and Advisers Meet

Will I ever face CGT from a property Deed of Gift

flashgordon1
Posts:1
Joined:Wed Aug 06, 2008 4:00 pm

Postby flashgordon1 » Wed Oct 10, 2007 1:16 pm

Hi All,

I gave my Grandma via a deed of gift with my wife the money so that she could purchase her council house via the right to buy. The aim was that she will live there until she passes away (hopefully many years from now) and we would eventially sell it on (not intending to receive any rent from her). Now that 3 years have passed from the original transaction (Aug 2004) we are about to complete the transaction for the property to be put in our names via a deed of gift through our solicitor and Land Reg etc.
Please can anyone help me to understand whether when I sell the property, I would have to pay any CGT? This is complex as the price she paid was discounted by circa 60% of the real price (so £31000 was paid and is listed on the Land Reg). 3 years on the market value is £140,000 and I am concerned that not having a value on the transfer from LR as no monies are exchanging hands could open me up to a hefty CGT bill in the future. Please can anyone provide an explanation on how CGT if affected at all would work or will I not have to pay any CGT given that the IR would not know the market value and therefore could not assess?

Any advice greatly appecaited.
Regards

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

Postby Peter D » Wed Oct 10, 2007 11:11 pm

Firstly why are you transfering the ownership. If she leaves it to you in her Will the end result is the same. You will have a CGT liability on the increase in value from the date of the Gift to the point of sale, The property will remain in Mums estate for IHT purposes as it iss a Gift with Reservation and you plave her home at risk if you become bankrupt or get divorced. This action may remove the property form any future Care Assessment by the LA but only to the detriment of the choice and quality of her care.
Has you solicitor explained all this too you. Read this, although quite an old article it is stuill valid and the value of base assessment is now £21,500 ? Please explain what you are trying to achieve.
http://www.age-net.co.uk/lifestyle/Will ... _wills.htm
Regards Peter

billypeel
Posts:9
Joined:Wed Aug 06, 2008 3:33 pm

Postby billypeel » Thu Oct 11, 2007 1:22 am

She may be a Life Tenant and you a Beneficiary. If so, see IR294 page 4, para 3.


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