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taxadvisor.uk, Chartered Certified Accountant
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, I am selling my mother's house under EPA. She moved

Resolved Question:

, I am selling my mother's house under EPA. She moved out after a fire in early 2011 and we rented since to pay home fees. Is there a CGT liability? I don't know the change in value 2011 to now.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
and welcome to the site. Thank you question.

If the property was your mother's only property and also her main residence before moving out, the gain is likely to be covered by these reliefs

- she would be entitled to private residence relief the period it was her main residence
- additional relief final 18 months of ownership whether she lived in it or not
- letting relief (up to a maximum of £40,000) as it was her private residence before it was let

It is most likely no CGT would be payable.

The gain is the difference between the selling price and the cost price (not valuation in 2011).

In the absence of figures I am unable to provide calculations

I would happily do that if you were to give me following information
- month and year of purchase
- month and year of moving out
- period the property was let (in months)
- cost price
- selling price

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 2 years ago.

, this is the information;

Purchase date April 1978

Price £15,850

Moved out Feb 2011

Selling Price £270,000

Let months

Regards

John

Expert:  taxadvisor.uk replied 2 years ago.
John, thank you reply.

Here asre my calculations -

Sale of property £270,000
Cost price £35,000
Capital improvements £0
Agents fees, solicitors fee and other costs - say £0
Total cost price £35,000
Potential gain £235,000
Period of ownership - months 388
Period as main residence - months 347
Private residence relief - months 365
Potential capital gain £235,000
Gain covered by private residence relief
(365/381) x 235,000 £221,070
Gain subject to capital gains tax (235,000-221,070) £13,930
Letting relief - maximum £13,930
This is lower of
£40,000 per owner £80,000
Private residence relief £221,070
Gain on the part of the property that's been let £13,930
Net chargeable gain after letting relief £0

As theproperty was occupied prior to 31 Mar 1982, the period of ownship begins on the date you first acquired the dwelling house, or on 31 Mar 1982 if that is later. Also you take the valuation on 31 Mar 1982 as cost base if that is higher than the original cost.

I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you my answer.

Best wishes.

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