In a nutshell - my parents bought a house (A) in the mid-1970's which my grandmother lived in until she died about 25 years ago (it is mortgage-free). Since then they have lived in their own house (B) and rented out house (A). As they grow old we've taken the decision to sell our house (C) and their house (B) and buy a new house together (D) - for which they will put in the proceeds of their house sale (B) and we'll pay the mortgage on the difference - so far, so good - everything is clear and we're fine.
However - house (A) is still owned by my parents. It is mortgage-free and we want to get a buy-to-let mortgage on it to fund some extension work on the new house (D). My parents are too old to get a mortgage on it and they don't want to sell it. They are however happy to give/gift/pass the house over to us. I understand that after owning it for 6-months we can then apply for a buy-to-let mortgage on it.
Our issue therefore is what will be liable for CGT-wise? They think they bought the house for about £1,200 in the 1970's and it's a basic 2-up/2-down terrace house worth about £80,000 in today's market. Taking £1,200 from £80,000 leaves 78,800 and at 18% does that make me liable for £14k tax???
I understand that me and my wife can both own it and apply our own tax-free allowances etc - but I still don't really understand it. Plus - 40-50 years down the line when we pass on - will my daughter be faced with paying CGT AGAIN. If so, can she be a joint-owner now (in some for of trust - she's only 9) - so avoid that or is CGT applied every time a property is bequeathed/given.
I appreciate I will have to engage the services of a professional - but I'm just looking for some general guidance.