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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10585
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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My parents in law have gifted their main residence and

Resolved Question:

My parents in law have gifted their main residence and anothe property to their three children but now want their main residence back. It was valued at £380k at the time of the transfer and have gone up to about £430k over the three years. They have been paying rent albeit not at what could be considered full market rent.
If we gave it back, are we, or they liable to any capital gains tax?
Submitted: 1 year ago.
Category: Law
Expert:  Aston Lawyer replied 1 year ago.

Hi, if the 3 children do transfer the property back, for Capital Gains tax (CGT) purposes, they are deemed to be "selling it at its current market value". Therefore, as they acquired the property for £380K, a profit of £50,000 has been made. Divide that by 3, leaves each of them with a gain of just under £17,000. Each of them has an annual allowance for CGT of £11,100 and if they have not used last financial year's annual allowance also of £11,100, there would be no CGT for them to pay (as they have a total allowance of £22,200). I hope this assists and answers our question. Kind Regards Al

Customer: replied 1 year ago.
we could just give it back, the tax man wouldn't expect to see the £50k payment from the in-laws?
What would be the process to hand it back, is it just land registry forms?
Also, I need to show this to all parties, what are your credentials so I can demonstrate that this is sound legal advice please.
Expert:  Aston Lawyer replied 1 year ago.

Hi, provided they haven't used this year's and last year's CGT annual allowances, no tax is payable. The Transfer back to parents would have to b done by way of the Land Registry Transfer document, called a TR1. You are best to ask a local Solicitor to prepare it, all parties sign it, and it then gets lodged at the Land Registry, who will change the Deeds back into parents names. I am a Conveyancing Solicitor, based in Staffordshire and have been practising for 21 years. Hope this helps. Kind Regards Al

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Customer: replied 1 year ago.
I just tried to validate your advice and cannot find anywhere on the government we site where it says you can carry forward a previous year's CGT? Can you tell me where this is defined?