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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11149
Experience:  30 years as a practising solicitor.
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Further question re CGT. Parents home is signed over to family

Resolved Question:

Further question re CGT. Parent's home is signed over to family in 1996 with the right to occupy as long as they wish - legal documents drawn up at that time. The parent is resident in the property till October 2011, dying in January 2012. Advised originally that ownership did not commence until the removal from the property in October 2011 but now been advised that ownership commenced in 1996. What is the view of HMRC on this situation - property is in Scotland.
Submitted: 3 years ago.
Category: Law
Expert:  JGM replied 3 years ago.
Thank you for your question.
Note that the right to occupy is called a liferent and the person who occupies for life is called the liferenter.
Section 63 of the Capital Gains Tax Act provides that the person entitled to property on the death of a proper liferenter shall be deemed to have acquired all the assets forming part of the property at their market value at death.
So that means that no gain accrues during the period of the liferent and No CGT is therefore chargeable during the liferent period.
So whilst ownership did start in 1996 it was subject to the liferent reservation in favour of the parent so in terms of the tax law no gain is deemed to have arisen during the period of the liferent.
I hope this answers your question.
Please leave a positive response so that I am credited for my time.
Customer: replied 3 years ago.

Thank you very much for this information - it confirms what the CAs believed but the solicitors disagreed, so it seems there is a variance in viewpoint between the legal profession and HMRC on this aspect of the disposal/ownership of property.

Expert:  JGM replied 3 years ago.
You're welcome.
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