cgt dependent relative

[doctoppo]

hope someone could give me some advice.
bought my mothers local authority house for her to live in rent free august 1989,she had rented the council house for approx 10 years previously,i bought the house after her husband had died due to her financial situation,my question is can i claim dependent relative relief, i understand this ended april 1988 but do i qualify since my mother was already living in the house.
thanks.

[Incredulum]

1. How much is the gain?

2. Is your mother still alive?

3. Do you need to sell the house?

[Peter D]

The 1988 date is absolute and your mother was renting the property out for 10 years previuos to your acquisition, not that that alters the fact you have timed out on the DRR. When she wqas rentiong it out did she own the property. If so why did you buy it from her. Regards Peter

[doctoppo]

thanks for the replies,
sorry didnt make it clear that my mother rented the house from the council ,i bought it in her name and transferred to myself 3 years later.
my gain is approx £80,000 and my mother is an active 90 year old and still lives in the house .i will sell when she no longer needs the accommodation.

[Peter D]

Transferring it into your name was not a particularly good Idea as you will be liable to CGT on disposal. May I ask what you were trying to achieve by putting it in your name. Regards Peter

[Incredulum]

Well, you can transfer it back to her in chunks - enough to utilise your annual exemption of 10k per annum. You will be able to mitigate the CGT at least.

[Peter D]

Beware that the property is clearly yours and should the LA come after the property because you Mum goes into care then the property will not be in her estate and there is no question of deprivation of estate. However this will give you a CGT liability when the house is disposed of. Transferring to Mum, even in chunks, clearly places those chunks in her estate and may be at risk if you Mum goes into care. Regards Peter

[doctoppo]

thanks again for the replies
the choice was leave the house in mums name and expose myself to possible care costs ,the safer option seemed to be transfer to my wife and i as tenants in common, at the time i thought cgt would not be to bad because of taper relief