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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13861
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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if a property which is the sole residence of a 93 year old

Customer Question

if a property which is the sole residence of a 93 year old lady is sold although 70% owned by her and 30% by her daughter is the daughter subjet to ccpital taxes
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
Can you confirm whether the 93 year old lady and/or the daughter resided in this property for any period of ownership - ( its clear that the 93 year old lady did, for maybe all of the time, but also please clarify this fact)
If there has been a time they did not reside there please advise what period this related to and whether the property was ever let out to tenants. If so for what period.
Thanks
Sam
Customer: replied 2 years ago.

the property has been owned and lived in by my friend the old lady for at least 10 years

Expert:  Sam replied 2 years ago.
Hi Peter
Thanks for your response
Then there is no capital gain for the lady as its been her home throughout ownership and as you do not indicate that the daughter has lived there at all, then she will have capital gains tax on 30% of the gain made.
From this 30% share of the gain, she can deduct 30% of the costs to sell, and 30% of the costs of any capital improvements undertaken on the property since she has held this 30% share.
Then the first £11,000 will be exempt, as this is her annual exemption allowance, with any remaining gain liable to capital gains tax.
The daughter should alert HMRC once the sale is complete, so they can arrange for a self assessment tax return to be issued after 05/04/2015.
Let me know if you have any follow up questions
Thanks
Sam
Customer: replied 2 years ago.

the property is to be bought by the ladies grandson who is resident abroad however she will continue to live there until she does not survive

Expert:  Sam replied 2 years ago.
Hi
Thanks for your question
The answer remains the same - only note that for capital gain purposes - for her daughter on her 30% share - market value of the property will be treated as the sale price, if the grandson pays less then this for it.
let me know if you have any further questions, but it would be appreciated if you would rate the level of service I have provided, as this ensures I am credited for my time
Thanks
Sam

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