This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Capilal gains tax query

peawit
Posts:3
Joined:Thu Mar 25, 2021 4:29 pm
Capilal gains tax query

Postby peawit » Thu Mar 25, 2021 5:00 pm

Back in 1993 my father gifted a house and land to my brother and me with the proviso that he would spend his day in it.
He passed away in August last year and we are now in the process of selling the property.

After he passed away in August 2020 my solicitor suggested I add my wife's name to the property deeds which is now
jointly in the names of my brother, my wife and myself.

The property was valued at £ 100,000 back in 1993 and at present we have a bid of £180,000.

Could you tell me how this setup will be assessed for CGT

I know each person receives a personal allowance of £12,300 but is this also the case of my wife
who was only added to the deeds in August 2020.

In other words will the capital gain of £ 80,000 ( If we take the current offer) be divided equally among the 3 of us
for tax purposes and with a total allowance of £36,900 (3 x £12,300 ) allowed.

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

Re: Capilal gains tax query

Postby bd6759 » Thu Mar 25, 2021 10:45 pm

If gave half your share to your wife, your brother will still have half the gain and you and your wife will have one-quarter each.

If you and your brother gave your wife 1/6 each it’s a bit more complicated:
Your brother is still effectively liable on half because that is what he has disposed of.
You are liable on one third
Your wife is effectively liable on the 1/6th she got from you (she hadn’t made a gain on the 1/6th she got from your brother)

peawit
Posts:3
Joined:Thu Mar 25, 2021 4:29 pm

Re: Capilal gains tax query

Postby peawit » Sat Mar 27, 2021 6:52 pm

Many thanks bd6759 for taking the time to reply

Much appreciated

peawit
Posts:3
Joined:Thu Mar 25, 2021 4:29 pm

Re: Capilal gains tax query - Further Question

Postby peawit » Fri May 21, 2021 3:12 pm

I am just about to complete the Disposal Return Form and one of the questions
asks:- what date did you get your share of the property.

In my case this was 1993 but in my wifes case this was 2020.

Will HMRC calculate the Capital Gains Tax on the gain I made between
1993 and today and for my wife the gain she made from the time
the house was transfered into her name in 2020 and today.

Or can we both claim for a gain of £80000 ie the difference of the house
value in 1993 and the sale price today.


Return to “Capital Gains Tax, CGT”