I live in a council house, i don't own it. i am my mothers carer i am on carers allowance 61 weekly and income support 42 weekly. my mum n dad lived in s wales uk . in 2010 dad died ,same year mum had heart failure followed year later with breast cancer n mastectomy and 20 session over 6 weeks radiotherapy. in sept2012 she put house in my name . i moved her near me in sheltered accommodation bungalow. house went up sale march 7th 2013 for 65000. couldn't sell it as no work in the valleys in resolven area so reduced to 62500 then 59950. just had offer of 54450.00.would i pay capital gains tax.or would it be better to put it back in mums name. i did live there with her from april 2010 to last july2013 with her for 70 per cent of those years when she moved up here. my son is moving out so i am gonna move her in with me. or should i put it back in her name.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
May I clarify for the avoidance of doubt please that you and your mother both live in the property as your only home please?
no, i live in wigan, in a council house ,which is a 400 mile round trip. My son is grown up. as it s so far way i had to live with mum down there most of time. with her illnesses chronic obstructive pulmonary disease heart and cancer .3 years of ill health mum 81 now .
no i live in rented council house. house is empty since july 2013 when mum moved up near me. we never rented it just put it for sale. but i didi live there for 3 years mostly while she was ill.
my mum and dads house which they bought in 1990 is the one up for sale in my name. she put it in my name as she had bin too ill that she said it be mine when she,d died in future so she put it in my name. buti want to know if i wod be liable to capital gains tax cos it mit be financially better to give it hr back . the money off sale .
the house for sale was my mums in south wales where i lived a lot for 3 years whilst she was ill
ihope joshua comes back I'm n good on computers this is my sons comp
Many thanks for the above. Based on what you say the property would be assessed for CGT on sale however only from the date your mother transferred it to you and the date it is sold.
You have a £10,900 allowance in any one tax year and accordingly if the capital gain between the date your mother gifted you the property and the date it is sold is less than £10,900 (remembering that you can deduct the costs of sale - e.g. solicitors and agents costs from the amount you sell it for - then there will be no CGT to pay.
Accordingly based on the figures you kindly provide It appears regrettably that the property value may have either decreased or at least not increased by any significant degree since the time your mother gifted the property to you and on the basis it has not made a gain (after selling expenses) of more than £10,900 there will be no CGT to pay.
Is there anything above I can clarify for you?
the house was valued by estate agent at 65000march 2013, i acquired it sept 2012. and it may sell soon may 2014 at 51 000 after sols fees and estate agents fees deducted. would i not pay capital gains tax on the fifty or forty thousand i acquire.
are you sure. if it was back to mum name wod it be safer
Do you know what its value was at the time your mother gifted it to you?
You may need to ask your estate agent to give you a written valuation for the property as at that date though from what you say I cannot see that it is very likely that the property has increased in capital value by more than £10,900 between the date your mother gifted it to you and the date of sale. If anything it seems more likely that it may have decreased in value based on what you say.
she bought it for 26 thousand in 1990 and we had it valued with a estate agent in 2010 69950. soin march2013 valued at 65000. could be in between those figs. house next door went for 52 and at other side went for45000.
Unless you consider it is likely that the property may increase in value by more than £10,900 after costs between the date of gift and the date of sale, transferring back to your mother will not have any tax advantages. However if you are keen to do so it is possible of course though you would need a solicitor to assist you and the costs would likely be in the region of £250-350 + VAT. To my mind given the cost of transfer you would want to be sure that there is a benefit to justify the costs and based on all the figures you are kindly quoting, there would appear to be no gain at all and certainly not one that falls in excess of your £10,900 allowance. Accordingly I cannot see any benefit in transferring the property back to your mother for CGT purposes.
will prob sell for 51,000.so if you knock 10900 allowance off do i owe capital gains or any tax on that income.surely have i not gained forty thousand pounds
I'm sorry I don't understand is it the money in between i pay the tax on
So for CGT purposes you "acquire" the property at the value it was at the date of your mums gift to you. Based on what you say the property was worth in the region of £65,000 at the time as valued by the agent in March 2013. Therefore you only pay CGT on any increase on the property from the amount it was worth at the time of your mums gift. You don't pay CGT on the full value of the property. From what you are saying the property appears to have reduced in value since the date of your mums gift so there would be a loss rather than a gain and accordingly no CGT is payable.
Does that make sense?
yes it does. would i pay normal tax on that money then
would the tax office contact me then to let me know i owe no capital gains on it
Obviously bearing in mind that based on the above figures there would not appear to be anything for you to pay, in the unlikely event that there was a gain on which you had to pay CGT you would pay tax at 18% on any gain assuming you are a lower rate tax payer. Based on what you say above though the property would likely have to sell for in excess of £70K before there was any significant danger of a CGT event.
i.e. more than £10,900 more than the property's approximate valuation of £60-65K at the time of your mothers gift to you. If there is CGT to pay you must submit a return yourself but if there is no tax to pay as seems likely based on what you say then there is no need for any action on your part.
Is there anything else I can help you with>
THANK YOU. I HOPE IT WORKS OUT FOR ME AND Y MUM AS YOU SAY IF IT DOES I WLL BE IN TOUCH.