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Where Taxpayers and Advisers Meet

CGT liability

jayhay
Posts:20
Joined:Tue Jun 23, 2009 8:46 pm
CGT liability

Postby jayhay » Sat May 12, 2018 11:01 am

Some 15 years ago we purchased our widowed mothers house. The motivation was to provide her with sufficient funds to maintain her lifestyle following the death of her husband. She continued to live in the house rent free until her recent demise
On legal advice we had her house officially valued at the time of purchase and paid her its full market value to avoid any future issue in respect to “a gift with reservation”

There is now a significant CGT liability should we sell the house. For this reason we are contemplating selling our own home and moving into the house we purchased from our mother.
It is our understanding that there is are allowances for each year we reside in the house that would significantly mitigate our CGT liability.
Any indication of the yearly extent of these allowances would be much appreciated

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT liability

Postby bd6759 » Sun May 13, 2018 9:29 am

There is no such allowance.

However, any gain that accrues on a property that is your residence is exempt from CGT. So if you live in it for 10 years, those 10 years will be exempt. This is calculated as a proportion of your total period of ownership, so in this example 10/25 of the gain would be exempt,


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