How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15760
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

We brought my in-laws house under right to buy in 1994,

Resolved Question:

We brought my in-laws house under right to buy in 1994, transferred into our name 2001. Since the purchase the in-laws have lived rent free, the father in law has since passed and mother in-law now on her own suffers with dementia. She has a family carer who wants to cease being her carer, my question is if my wife and I sold our house and moved into the house to care for her (unknown time) would we still pay capital gains if at a later date sold the house?
Submitted: 3 months ago.
Category: Tax
Expert:  TonyTax replied 3 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 3 months ago.

There are no reliefs from Capital Gains Tax for the circumstances you describe I'm afraid.

Assuming that you have lived in your current home for the entire period of ownership, you will pay no CGT so long as you sell it within 18 months of moving out. As for the home your mother in law lives in, you will get exemption from CGT for the period (as a proportion of the whole period of ownership) that it is your main home and for the last 18 months of ownership when you aren't living there. The balance of the gain will be subject to CGT, though each of you will get an exemption for the first £11,100 of gains you make in any one tax year.

Another consideration is Inheritance Tax. Whilst you own the property, as your mother in law has lived there rent free since 2001, the start of your actual ownership period, it has effectively been a gift with reservation of benefit and will remain in your mother in law's estate for IHT purposes until seven years have passed after the reservation of benefit ends either by your mother in law moving out or by her paying a market rent to live there.

I hope this clarifies your position but let me know if you have any further questions.

Customer: replied 3 months ago.
Re Inheritance Tax - in 2001 the deeds and land registry were transferred into our name with written agreement that the in-laws lived in the house for a peppercorn rent until it was no longer required. Therefore would we be subjected to Inheritance Tax as suggested above?
Expert:  TonyTax replied 3 months ago.

A peppercorn rent isn't a market rent so that would not help the IHT position.

On sale, you might try to claim letting relief which would reduce your CGT liabilities. Take a look at Example 9 in HS283 here.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15760
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions