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Where Taxpayers and Advisers Meet

CGT liability

Posts: 7
Joined: Thu Jul 09, 2015 5:07 pm

CGT liability

Postby logistic » Mon May 21, 2018 8:34 am

Our parents retired to Spain some years ago but on the recent demise of our father our mother has returned to the UK and now reoccupies their home in the UK. During their absence in Spain their UK home was rented out for several years and as a consequence we have been advised as follows:

The several years that the property was let out, during their time in Spain, has generated a capital gains liability in respect to the property.
That it would be tax efficient if our mother remained in the property, as on her eventual demise the property, which she has left to us, will no longer bear a CGT liability. As our mother is of very modest means there would be no IHT on her estate.

As the property was held by our parents as tenants in common it passed to our mother on the death of her spouse.
Did the death of our father and the transfer of his share of the property to his spouse, result in any reduction of our fathers share of the CGT liability that was generated by the several years the property was rented out?

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Joined: Fri May 16, 2014 3:47 pm

Re: CGT liability

Postby AGoodman » Mon May 21, 2018 11:36 am

Yes, your mother will have inherited your father's half share at probate value - so no CGT on that half if sold for a price around or less than probate value.

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Re: CGT liability

Postby wamstax » Mon May 21, 2018 2:27 pm

If a property has been an individual’s main residence at any time and is then let out the individuals gain generated by the let out period can be covered by relief called letting relief which is the smaller of
(a) the amount of main residence relief qualified on the property
(b) the amount of gain attributable to the period for which the Property was let out OR
(c) £40,000 per individual
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