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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I inherited half my parents house when my father died. so

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Hi I inherited half my parents house when my father died. so my mother and I own it jointly.
she lives there and I do not. we are selling some land in the garden for development and I was wondering if there is a capital gain tax implication for me even though I wont receive any monies for the sale. I will not be receiving any of the proceeds it is all going to my mother to supplement her pension.
Submitted: 10 months ago.
Category: Tax
Expert:  bigduckontax replied 10 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I need to know one critical piece of information before I can address your question. How big is the whole plot that the house and garden occupy, ie what is the acreage?
Customer: replied 10 months ago.
Hi Keith
it is measure in sq ft I have attached plan from the approval for you to best see it.
Rick
Expert:  bigduckontax replied 10 months ago.
Yes, but I do not see the square footage of the plot size. There is a Capital Gains Tax (CGT) exemption for a main residence including grounds not exceeding half a hectare (about 1.25 acres). If the whole plot is within the half a hectare limit then the transaction will escape CGT. I do hope that you find my reply of assistance, Rick.
Customer: replied 10 months ago.
it is below that size but this is not my main residence as I told you in my initial transcript.
so as it is not my main residence what is the implications for CGT. remember I am not receiving any money.
Expert:  bigduckontax replied 10 months ago.
As it is below half a hectare then there is a CGT exemption for part disposal.
Customer: replied 10 months ago.
and that includes non main residence?
Expert:  bigduckontax replied 10 months ago.
If part of an under half a hectare plot is sold by anyone there is a CGT exemption. It is the plot size that is the key, not the ownership.
Customer: replied 10 months ago.
thank you for this.
do I need to declare it on my self assessment even if it is exempt?
is there somewhere this is referenced on hmrc web site I can look this up for my records.
Expert:  bigduckontax replied 10 months ago.
I am deeply sorry, I have mislead you. This CGT exemption is actually an extension of private residence relief so if this property is not your sole or main domestic residence the exemption will not apply. If you actually live elsewhere, but rent, and this joint tenancy with your Mother is your only house then the extension will apply. Deep apologies for my error.
Customer: replied 10 months ago.
ah ok, that is what i suspected. so if I signed over the house to my mother so she owned it outright would I have to pay CGT when I signed over even if I don't receive any money for the transaction? the sale of land would then be wholly down to my mother and be exempt.
Expert:  bigduckontax replied 10 months ago.
That is possible, but by signing over that would count as a disposal and you could be held liable to CGT on the gain made over the current market value from the probate value at your late father's death. You would have the usual non cumulative Annual Exempt Amount (AEA) of 11.1K to offset this gain which would be taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of transfer. Beware, the value of the property could be significantly increased if planning permission has been granted for the development and this could adversely affect your CGT position.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3356
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 10 months ago.
ok thank you for you advice.
Expert:  bigduckontax replied 10 months ago.
Thank you for your support.

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