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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 ask if you granted your mother any form of life interest to live in the property for the rest of her life please?
No. The rationale was that all 3 parties were using the house.
My mother lived in it.
My wife and I didn't have a home in the UK and so used my mother's house as an ongoing base.
Thanks. This would have been the ideal scenario because this would have meant that you and your sister would have taken your shares back from your mother on her passing at the current market value for CGT purposes. However from what you say this in not open to you at this point.
And my sister also didn't have a home in the UK and ditto used it as a base. All of us were regularly using the house and that is what motivated my sister and I to each purchase a one-third share.
If you have used the property as your main residence then there is no GCT issue for you. Is your sister domiciled in the UK for tax purposes or in the US?
give me five minutes, please
I can't contact her. I think we have to say USA. I know she fills out US tax forms, but works for a London company and rents a flat in London as she is in UK frequently on business.
Thank you. If she is not domiciled here then as things presently stand she will not be liable for CGT at all. This is due to change in the next year however so she will wish to consult an accountant in the near future in order to structure her affairs so as to best mitigate CGT which will depend upon her circumstances.
There will be no CGT payable on your mothers share as things presently stand as you will inherit this for CGT purposes at the present market value.
Accordingly if you have used the property as your PPR, your sister is not domiciled here and you have recently inherited your mothers share between you there should be no CGT issue at present.
What's the score regarding building on the newly created plot? I imagine we can't just build and sell??
In terms of how you go forward, it obviously depends upon how you decide to arrange your affairs. If you were to build a new property and give / sell this to your sister then this becomes her issue going forward and she will in the future be liable for CGT even if not domiciled here and she can only avoid this if she makes the property he main residence. She can mitigate the CGT however using a combination of reliefs and expenses in respect of any gain.
That's fine, Joshua. You've given very good value and as I explained in "already tried" I only wanted a template. Thank you very much, Guy
Sorry to push my luck, Joshua. But if I sell the main res and move next door into the one I hope to build, can I call that my new main house and co-own it with my non-dom sister? Or is it easier if I just own it myself as main res.
Golly, I didn't know you were still there"! I'll leave you a tip. What would be the best plan? I am simultaneously tarting up the old house and building the new one. Can I sell the original house, share the proceeds with my non-dom sister, and then move next door with my wife and call that my new main residence (it would be true) and my sister would be happy for this house to be in my name- the idea being we would square up after it was sold. How long would I have to stay in new house?