Contracts exchanged 8/4/14 completion 11/4/14
Parents continued to live in the property until death, and they paid 1 peppercorn rent per annum.
The property was not let and neither myself or any of my siblings lived there.
Hi again.CAPITAL GAINS TAX Given that the property has been sold, there isn't really anything you can now do to mitigate your tax exposure I'm afraid (but see below).If you received £55,000 net of expenses and you exchanged contracts on 8 April 2014, then you have made a gain in the 2014/15 tax year of £36,250 (£55,000 - (£75,000 / 4)). The annual CGT exemption of £11,000 will cover the first £11,000 of the gain so you will be left with a net taxable gain of £25,250.There are two rates of CGT, 18% and 28%. The rate or combination of rates you will pay will be dependent on the level of your income in the tax year of disposal of the property. You earn £22,000 (I'm assuming you have no other income) and the personal tax allowance of £10,000 will leave you with a net taxable income of £12,000.The basic rate tax band covers the first £31,865 of taxable income in 2014/15 so you are left with £19,865 (£31,865 - £12,000) of that to use against the gain. So, £19,865 of the taxable gain will be taxed at 18% (£3,575.70) and the balance of £5,385 will be taxed at 28% (£1,507.80. Your CGT liability will be £5,083.50 and this will be payable on 31 January 2016.Each of you and a your siblings should report your respective shares of the gain to the tax office. Any of you who are not registered for self-assessment can do so by completing a form SA1. Given that this is a one off situation, you may only need to complete and submit one tax return. That will be issued to you after 5 April 2015 and you can read about the submission deadlines here.As far as reducing your tax exposure is concerned, depending on your circumstances you might be able to pay pension contributions to take the sum of your salary and the net taxable gain down from £47,250 to £41,865 or less which would save you £538.50 in CGT as the net gain would all be taxed at 18%. GIFT BY YOUR PARENTSAs your parents gifted the house to you and continued to live there not paying a market rent, please read the notes under the heading "Giving your home away and continuing to live in it" here and the notes on gifts with reservation of benefit here and here. This won't be a problem if your parents estates (I'm assuming they have passed away) were each less than the Inheritance Tax nil-rate band. You ought to be aware of the GWR rules as this only comes to light in many cases after the death of the last surviving parent who has continued to live in a property they gave away.I hope this helps but let me know if you have any further questions.