Postby LozaACCS » Fri Sep 11, 2015 5:49 pm
A gain will arise (as already noted) based on the sales proceeds or market value on disposal less the market value at 31 March 1982,(not the original cost).
There may be relief for any capital expenditure and as King Maker points out DRR.
I do think there may be an exposure to income tax under the pre owned asset tax rules.
If your parents sell the property and gift the cash to you, which is then used by you to buy a property in which they then live, then they will have a PET for IHT purposes, the tracing rules for a GWR will not apply unless the gift was on condition that the property was acquired.
The gift will however meet the contribution condition for POAT and an income tax charge would arise.
If however the new property was purchased jointly then the relief offered at S102(b) FA 1986 would shield against either a GWR or POAT charge, (for as long as you live there)
The capital gain on the property could be held over if the gift were made into trust, this would however make borrowing against it difficult.