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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4985
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My father has just passed away. He lived in his own house.

Customer Question

My father has just passed away. He lived in his own house. The house was previously owned by my father, my mother who passed away in 2004 and my sister who previously lived in the house all her life, up to 10 years ago. Her name was added to the deeds in 1985. She has lived in a flat for the past 10 years and looked after my father who has lived in the house in question. The house is worth approx £130000. Will she have to pay capital gains tax if she sells the house now?
Many thanks.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question...

gain from sale of residential property is chargeable to CGT.. There are reliefs given against the gain before arriving at chargeable gain.

As your sister owned 1/3 share of the property, she would claim private residence relief against her share of the gain for all the period (since her name was added to the deeds) she lived in the house as her main residence. She would also get relief for final 18 months of ownership as it was her main residence at some point during the period of ownership.

To answer your question, she may have to pay some CGT depending on the amount of gain (her share) and relief available as aforementioned. One would only know what thsi is once the calculations have be performed.

Once the chargeable gain is calculated, she would get gains allowance against it and the balance would be taxed at 18%, 28% or a combination of both depending on her taxable income in the year of sale.

More information of private residence relief can be found here

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief

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.

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question...

gain from sale of residential property is chargeable to CGT.. There are reliefs given against the gain before arriving at chargeable gain.

As your sister owned 1/3 share of the property, she would claim private residence relief against her share of the gain for all the period (since her name was added to the deeds) she lived in the house as her main residence. She would also get relief for final 18 months of ownership as it was her main residence at some point during the period of ownership.

To answer your question, she may have to pay some CGT depending on the amount of gain (her share) and relief available as aforementioned. One would only know what thsi is once the calculations have be performed.

Once the chargeable gain is calculated, she would get gains allowance against it and the balance would be taxed at 18%, 28% or a combination of both depending on her taxable income in the year of sale.

More information of private residence relief can be found here

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief

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.