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bigduckontax
bigduckontax, Accountant
Category: Tax
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My mother is moving house, we advised to to use a solicitor

Customer Question

my mother is moving house, we advised to to use a solicitor tosell the house and to buy the next one. As far as I know this means she will not pay income tax on the sale.
She wants to sell the house, put the money into HER personal bank account and then use that to be a cash buyer when (if) she finds another house to move into.
Will she pay income tax on the proceeds of the sale if she moves the money into her personal bank account?
What capital gain tax will she pay, the house is her prime (oly) resudence?
Thx
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I note that this house is your mother's sole or main domestic residence. Firstly, there is no income tax on the sale of property unless one is dealing in property as a business; she is not so trading. As it is her sole and main domestic residence she is entitled to Private Residence Relief (PRR) which is at 100% of any Capital Gains Tax due. PRR is given automatically by HMRC. The only tax which might arise is the Income Tax on any interest she receives on the moneys deposited in the interim and most deposit takers deduct basic rate tax at source before crediting interest anyway. Effectively there is no tax involved whatsoever in your mother's house moves. I do hope I have been able to set your mind at rest on this matter.
Customer: replied 1 year ago.

just to claify, if she puts £240000 into her bank account, the proceeds of the house sale, she will not pay tax at all?

I do not understand how the bank will know where the money came from?

Wont the bank deduct tax and then expect her to claim it back from HMRC at the end of the tax year?

Expert:  bigduckontax replied 1 year ago.
Correct, except on any interest the deposit may earn.
There are two ways; if her solicitor pays it in he will advise anyway. If she pays it in she merely tells the bank the source of the money. That should head off any money laundering inquiries quite easily.
Certainly not; the only tax the bank will deduct is that on any interest earned on the money deposited and that at the basic rate of 20%
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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