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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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, I have a third share in my mother's house who died

Customer Question

Hello,
I have a third share in my mother's house who died in March 2003. My uncle has lived there rent free since then but has now moved in with my sister. The house is on the market for £99950 and the value at my mother's death was £35000. Assuming a sale at approx £95000 and expenses of say £5000, how much CGT will I pay?
I am a married man of 67years with industrial and OAP gross income of £28000. My wife has a full OAP pension only.
Kind Regards
John
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site.

Thank you for requesting I help you with your question.

Your share of the net gain is (95,000-40,000)/3 approx £18,333.
You are entitled to gains allowance of £11,000, making the net gain (18,333-11,000) £7,333.

Your total income including the aforementioned gain will keep you within the basic rate of tax threshold. Therefore, the gain would attract CGT rate of 18%.
CGT payable is 7,333 x 18% = £1,320.

Transferring funds to your wife is not going to change your tax payable on the gain. If you were to transfer 50% of your stake in the property to your wife before the sale, and then sell the property in say 2/3 months, you would escape paying CGT.

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 1 year ago.

Thanks for your reply and advice. I am happy to pay the CGT you have calculated as I was advised by my solicitor that any transfer to my wife within 6 months of the sale would adversely affect any mortgage application by a prospective buyer.

Kind Regards

John

Expert:  taxadvisor.uk replied 1 year ago.

John, thank you for your reply.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

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