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 taxadvisor.uk Your Own Question

taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4943
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

I am part selling part giving a house left to me some years

Resolved Question:

I am part selling part giving a house left to me some years ago to my daughter. I realise that I will have to pay Capital Gains Tax on the total value but are there any other taxes to pay on the sale part? Can you help please?
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Tax implications for part selling and part gifting the house ..

Capital Gains tax
For CGT purposes, gain from the property (difference between the sale proceeds/market value if sold below market value and valuation when property was left to you) would be chargeable to CGT. You get your gains annual allowance against the cahargebale gain and the balance would attract CGT at 18%, 28% or a combination of both depending on your total income in the tax year of sale. If the property is jointly owned then each owner would get gains allowance (current year £10,900).

Apart from CGT there are no other taxes to pay on the sale part.

Inheritance tax
The part giving bit would be regarded as a potentially exempt transfer for inheritance tax purposes and will be subject to seven year rule. basically, if you survive for seven years after making a gift to someone, the gift is generally exempt from Inheritance Tax, no matter what the value.

More information on potentially exempt transfers can be found here

http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm#4

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.

Given that my income is around 12k and my wifes a lot less. The house value around 200k. 100k gift 100k sale. Is our income for 2014 an additional 100k or 200k to determine the CGT rate (18% or 28%). I am not looking for you to do the actual sums just point me in the right direction so that I get an idea of what we are letting ourselves in for. Very impressed so far, thanks.

Expert:  taxadvisor.uk replied 3 years ago.
Peter, thank you for your reply.

First of all you should not base your CGT on the value of the property i.e. £200k but on the difference between the value when you inherited the property and the current value - the profit you make on transfer of property.

For your convenience here is an example of how CGT would be calculated -

CGT calculations
Sale proceeds £200,000
Cost price - valuation some years ago £120,000
Potential capital gain £80,000
Number of owners 2
Tax year 2013-14
Gains chargeable to CGT 80,000
Annual Gains exempt allowance 21,800
Chargeable gain 58,200
Chargeable gain per owner 29,100
Assuming personal allowance for each 9,440
Your CGT
Income 12,000
Personal allowance 9,440
Chargeable income 2,560
Chargeable gain taxed at 18% 29,100
Chargeable gain taxed at 28% 0
CGT 5,238
Your wife's CGT
Income 9,440
Personal allowance 9,440
Chargeable income 0
Chargeable gain taxed at 18% 29,100
Chargeable gain taxed at 28% 0
CGT 5,238
TOTAL CGT 10,476

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4943
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes.
Customer: replied 3 years ago.


Does the "cash" part of the sale (as against the gift) count as income for the year, thus puting me in the 28% bracket?


I am realy most happy with the service but this was another of those 4 am


niggles.


Regards, Peter Gale

Expert:  taxadvisor.uk replied 3 years ago.
Peter, thank you for your reply...

It's the total gain from transfer of property to your daughter that would determine whether you pay CGT at 18%, 28% or a combination of both. Cash part of the sale does not count as income but capital gain as does the gift.

In my example if the gain is £80k then CGT rate applied will be 18%.

I hope this is helpful.
Expert:  taxadvisor.uk replied 3 years ago.
Your reward of a bonus is greatly appreciated.

Best wishes.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • 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
  • 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
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions