How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Joshua Your Own Question

Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
35043042
Type Your Law Question Here...
Joshua is online now

Our mother lived in the family home for 60 years until her

Resolved Question:

Our mother lived in the family home for 60 years until her death last year. My sister and I (in our sixties) each bought 1/3 share in the home some years ago. There were no IHT issues as regards XXXXX XXXXX death. She left her estate 50/50 to my sister and me. We are in the process of having our mother's retained 1/3 share in the house divided between us, thereby giving us each 50% ownership of the property.

I lived in the house for a year before our mother died, looking after her. I am still living here as my wife and I are doing extensive renovations.

So, I think I can safely say this is our (my wife and I) main residence. We are on the voters roll, use this address for the taxman, etc. Our only other home is a holiday home in Spain.

It is difficult for my sister to claim this home as a primary residence as she lives mostly in New York. (or is it??)

We have recently been told we can subdivide the garden and create a new building plot. We would like to do this, build on it, and eventually sell both properties.

Can we create a situation where both my sister and I can claim this as a main residence?
How can we also create a situation where, for example, the existing house stays as my main residence and the newbuild becomes my sister's main residence. In short, how do we minimise CGT?
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.

Joshua :

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.

Joshua :

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?

Customer:

No. The rationale was that all 3 parties were using the house.

Customer:

My mother lived in it.

Customer:

My wife and I didn't have a home in the UK and so used my mother's house as an ongoing base.

Joshua :

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.

Customer:

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.

Joshua :

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?

Customer:

give me five minutes, please

Joshua :

No problem

Customer:

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.

Joshua :

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.

Joshua :

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.

Joshua :

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.

Customer:

What's the score regarding building on the newly created plot? I imagine we can't just build and sell??

Joshua :

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.

Customer:

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

Customer: [email protected]
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and other Law Specialists are ready to help you
Customer: replied 3 years ago.

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.

Expert:  Joshua replied 3 years ago.
If you move next door you can flip your exemption if you wish. If you shared ownership that exemption would only apply to your share though so it may be more tax efficient to have all of your investment in one property over which you can claim full exemption rather than part in one and part in the other (the other being potentially liable to CGT. Though depending upon the figures after relief and exemptions it may be that this would offset the gain sufficiently to make this point academic
Customer: replied 3 years ago.

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?

Expert:  Joshua replied 3 years ago.
Normally the most tax efficient approach would be to sell the existing property CGT free (subject to your sister bening non-dom) but certainly in respectnof your share and then move to the new house which having lived there for a period you could then also sell CGT free if it were your main residence.

When this new house were sold your share would be CGT free. Your sisters share may be subject to CGT even if she is non domiciled under new rules that are due to come in.

If you were to settle up (off the record so to speak) this would amount to tax fraud for your sister though whether it would be picked up is another question. That is a matter for her though as your share would be CGT free as your main residence.

is there anything else I can help you with?
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and other Law Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.co.uk/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.co.uk/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.co.uk/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.co.uk/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.co.uk/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.co.uk/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice