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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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Is Capital Gains Tax due? In 1998 the house was valued

Resolved Question:

Is Capital Gains Tax due?

In 1998 the house was valued at £60k, under right to buy scheme. My mother having been a council tenant in this house for 30 plus years, bought it for £24k. This £24k was financed by myself and my brother - £12k each.

In 2004 the ownership of the house was transferred to myself and my brother, no further money involved. The house is three bed roomed with small office/playroom.

Looking at Zoopla for 2004 houses similar, in the same road, sold at this time were £157- £162k without the office./playroom. We therefore surmise that the selling price at that time would be £164k.

My mother continued to live in the house owned by myself and my brother, rent free until Nov 2012 when she moved in to a nursing home.

The house has just been Sold STC for £181k , a gain of £17k. Works undertaken to make it sellable were approx £3k, receipts kept.

I have lived in the house since Feb 2013 as my only residence, but moving out in July 2014

Is there any capital gains tax due when we sell?
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
Hello,

Do you and your brother own it jointly and do you have a second home?
Customer: replied 3 years ago.

We own it jointly and we both have another house.


 


 


I have been living in the house in question as our main residence with my husband for apprx 17 months whilst we have bought and dome major renovations on a house nearby. Will be moving out in July 2014


 

Customer: replied 3 years ago.

What happens now? Do I wait for an answer or start again? I keep getting a window asking for more money for a monthly suscription but I just want an answer to my question with out a subscription.


 


Please note I am in UK - UK time not EST.


 


Thank you

Expert:  UKSolicitorJA replied 3 years ago.
Thank you.

As the gain on the property is £14K, no capital gains tax is payable as the property is held jointly and your combined annual CGT allowance is £22K or 11K each. Any gains up to this amount in a year are not subject to capital gains tax.

Hope this helps
Customer: replied 3 years ago.

That was my initial thinking but looking on the internet I was concerned about when the starting point would be.


 


1998 Value £60k mother paid £24k


2004 House transferred to brother and I for no further money but valued at approx £160k at time of transfer.


 


So the starting point is 2004 until present fror CGT calculation


 


 

Expert:  UKSolicitorJA replied 3 years ago.
Your mother could claim that it was her main home and therefore no CGT was payable when she transferred it to you and your brother in 2004.

So for you, starting point is 2004.

All the best
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