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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13942
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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'm concerned about possible CGT on sale of a house which was

Resolved Question:

'm concerned about possible CGT on sale of a house which was gifted to me.
My mum gifted it to me and my brother jointly 5 years ago, - my brother then gifted me his half 2 years ago.
If I sell it do I pay CGT?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi
Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.
Has this property ever been your home, during the period from when it was first gifted?
And did you pay your brother anything for his half share? If so how much.
Has your Mm continued to live in this property since she gifted it, and has she paid either you or your brother market value rents to remain living there?
Thanks
Sam
Customer: replied 3 years ago.

Thanks Sam,

Mum lived in it for 2/3 years after gifting it before having to go into a home.

No she didnt pay rent.

My brother lived in it then for 18 months before gifting his half to me and I then re-mortgaged it on a buy to let and have been renting it out since.

I have never lived in it.

Customer: replied 3 years ago.

Do I have to pay fo more answers?

I'm confused about this service

Expert:  Sam replied 3 years ago.
Hi
You have offered an amount for the service, which you then can choose to accept once you have the answer. But in the meantime we offer additional services - and I have offered you this in the form of a telephone call, which you can either accept (at the new amount) and you can telephone me - (as your position is complex) OR you can decline and we continue to type back and forth.
Thanks
Sam
Customer: replied 3 years ago.

I would prefer to type back and forth at the moment please.

Carole

Expert:  Sam replied 3 years ago.
HI Carole
That's fine, and sorry for the delay I was on a call with a client.
Yes you will be liable to capital gains tax as this was never your main residence, and this will be the sale price less the value at the time the property was gifted, which then will be apportioned 50% for the time you owned the half share - and then from the time it was fully owned by you.
But you have not advised what the funds from the buy to let mortgage were used for - did you pay your brother off for his share?
Did he move out after?
Also I should advise as no rents were paid to you from your Mum - then she also will be liable to pre owned asset tax, as she continued to benefit from an asset that she no longer owned, and this will have an impact on both Inheritance and income tax.
I have added a link here regarding the pre owned asset tax position.
http://www.hmrc.gov.uk/poa/poa_liable.htm
And for Inheritance tax purposes, the value of this property will need to be added back into your mothers estate as it will be treated as a benefit with reservation - and not a potentially exempt gift.
Plus this may have an impact on care home fees if Mum is receiving funding from the government for her fees.
So you can see this is very complex, but I am happy to type back and forth as required, and if you have any follow up questions, then please do ask.
Thanks
Sam
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