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Where Taxpayers and Advisers Meet

If we sell or move. Above IHT threshold

Bobwyatt1
Posts: 2
Joined: Fri Jan 24, 2020 10:46 pm

If we sell or move. Above IHT threshold

Postby Bobwyatt1 » Fri Jan 24, 2020 11:06 pm

Hi. Thanks for reading this. My Wife and I were gifted our house in December 2015 (solely in my name and been living here for 25 years) by my parents. Value at time of transfer was £150,000. My family has grown and we now have three children so our old listed cottage is no longer suitable and would now like to move. The house was way under valued in 2015 and we have renovated and made good the farm buildings and we believe it could be worth in excess of £325,000 now. My question is, would we be able to sell and move inside the seven years and will this effect CGT or IHT?
Thankyou. I feel like were in the middle of a tax mine field.
Bob.

maths
Posts: 7895
Joined: Wed Aug 06, 2008 3:25 pm

Re: If we sell or move. Above IHT threshold

Postby maths » Sat Jan 25, 2020 8:00 pm

There is no time limit restricting a move.

The 7 year limit refers to IHT; if donor dies within 7 years of date of gift then gift falls within a charge to IHT (however, it may mean that the actual charge is zero if gift falls within the nil rate band; £325k) irrespective of whether a move occurred or not.

Any capital gain on sale falls subject to CGT but it would seem that private residence relief applies (as you have lived there's Ince the gift to you was made) and hence no CGT charge.

I assume parents did not live in property after gift to you; if they did, then there may be gift with reservation issues.

Bobwyatt1
Posts: 2
Joined: Fri Jan 24, 2020 10:46 pm

Re: If we sell or move. Above IHT threshold

Postby Bobwyatt1 » Thu Jan 30, 2020 8:37 pm

Thats Great. Really appreciate the reply. Seems like we've done things the right way round. Just ourselves and three children been living here for the past 25 years so should be ok then. Thanks again. Very helpful forum.


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