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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  International tax
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My parents own two properties one is a partly owned by them

Resolved Question:

My parents own two properties one is a partly owned by them and some other relatives. The other is there main home which they are selling to me for £300000. They are gifting me a deposit of £190000 and I have obtained a mortgage of £110,000. Will they have to pay capital gains tax
Submitted: 1 year ago.
Category: Tax
Expert:  TaxRobin replied 1 year ago.
HelloYou don’t pay CGT when you sell your home if all of the following apply:you have one home and you’ve lived in it as your main home for all the time you’ve owned ityou haven’t let part of it out - this doesn’t include having a single lodgeryou haven’t used part of it for business onlythe grounds, including all buildings, are less than 5,000 square metres (just over an acre) in totalyou didn’t buy it just to make a gainThey don’t need to do anything. They’ll automatically get a tax relief called Private Residence Relief.The amount they gifted you is under the 7 year rule for inheritance tax. (The original owner must live for 7 years after giving the gift. Any gifts made less than 7 years before death count towards the Inheritance Tax threshold (£325,000). They count towards the threshold before the rest of the estate.)You are required to click a positive rating so I am credited with the response.
Customer: replied 1 year ago.
Hi My query is they have 2 homes and the £190000 is a gift from them to me and I have read they may be subject to capital gains tax. Ive seen the answer you have sent on the gov web site but need to know if they would be having to pay CGT on the £190000 they have gifted me
Expert:  TaxRobin replied 1 year ago.
No the gift would be covered and not have tax as long as they survived for 7 years.Where an individual has two or more residences within the meaning of Section 222 it is not mandatory for that individual to make a notice nominating which is to be treated as the only or main residence.The residence which attracts relief is the dwelling house which is the main residence as a matter of fact.
Customer: replied 1 year ago.
So they would definitely not have to pay capital gains tax even though they are gifting me £190000 in equity of the property and selling it to me I was told because they are gifting me the £190000 this will be subject to capital Gains tax
Expert:  TaxRobin replied 1 year ago.
The gift would not be taxable.
TaxRobin and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thankyou
Customer: replied 1 year ago.
Can I just double check as they are gifting me from the equity within the property - i.e the property is worth £300000. I only have a mortgage for £110,000 therefore the rest is equity in the property. I just want to be sure they will not end up with a tax bill they cannot afford
Expert:  TaxRobin replied 1 year ago.
Inheritance Tax is paid if a person’s estate (their property, money and possessions) is worth more than £325,000 when they die. This is called the ‘Inheritance Tax threshold’.If they give that much away within 7 years before they pass then tax would apply.They are not taxed on their main home in a sell and the amount of the equity is less than the allowance. Plus the 7 years are still in play.