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 TaxRobin Your Own Question
TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15722
Experience:  International tax
14155347
Type Your Tax Question Here...
TaxRobin is online now

I have lived in my mother's house with my Mother for 13 years.

Resolved Question:

I have lived in my mother's house with my Mother for 13 years. she gifted me 35% of the house just over a year before she passed away earlier this year. The house was left to myself and my brother (who lives elsewhere). We plan to carry on living in the house for some years. When we finally decide to sell up and move on will we be liable for capital gains tax?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello and thank you for allowing me to assist you.
Your brother may but if you live in the property you would not pay Capital Gains Tax on your residence.
When you inherit an asset from someone who's died, there's no Capital Gains Tax to pay at that time.
When you sell or dispose of an inherited asset, you may be liable to Capital Gains Tax on any profit or gain you make.
You would be allowed personal residence relief but your brother would not.
Customer: replied 3 years ago.
We have paid inheritance tax on property, but in a few years time when we sell will I be liable for capital gains tax? A bit of a grey area! I live in the house I have inherited 13 years now and since the beginning of last year I have owned 35% of it and am assuming even though the gift of 35% has been included for IHT purposes that percentage is not going to be liable for capital gains tax! The remainder of the house is what concerns me. As an inheritance and likely to be worth more when we sell will the remaining percentage that has been left to me be liable for capital gains tax as I live here?
Expert:  TaxRobin replied 3 years ago.
If you live in the home you will not pay CGT yourself on the portion that you own.
If the inherited asset is a property that you live in as your main home from the time you inherit it to the time you sell or dispose of it, you may not have to pay Capital Gains Tax when you dispose of it. This is because any gain you make when you dispose of your main home may be free of Capital Gains Tax through 'Private Residence Relief', whereas a gain on any other home may not be.
You will be allowed to use the Personal Residence Relief.
When you sell or dispose of your own home you won't have to pay any Capital Gains Tax if you satisfy two conditions. For the whole time you've owned it both the following must apply:
it's been your only home or main residence
you have used it as your home and nothing else
You will not pay CGT as the law stands right now. Your brother might have to pay Capital Gains Tax if you sell and it's gone up in value since the date of death.
TaxRobin and other Tax Specialists are ready to help you