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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 16223
Experience:  30 years as a practising solicitor.
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I am looking to buy the house I’m currently living in which

Customer Question

Hi there, I am looking to buy the house I’m currently living in which is owned by my parents. They were willing to sell it to me at a reduced amount as they have separated, and my mother is currently living with me. My mother wants to use the money she gets for the sale of the property to buy herself a new place to either move into or to rent out as a source of income. But as they only bought the house for £48,000, and the value of the property is now £360,000 she is now reluctant to sell it to me as the capital gains tax payable would be quite high and she wouldn’t be able to buy somewhere equivalent once the tax had been deducted.I have read online that as they are separated, they could sign a deed of separation, and that would mean she can claim residence on the property we are currently in and be exempt from the CGT, is that correct? And if so, does this have to go through the courts or is it something they can achieve by getting a document from a solicitor and signing in front of witnesses?
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: no
JA: Have you talked to a lawyer about this?
Customer: no
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no
Submitted: 5 days ago.
Category: Law
Expert:  JGM replied 5 days ago.

Thanks for your question. I am a solicitor in the UK with 35 years of experience in private practice and I hope that I can help you with your question today. Let me just read your question and I will either give you an initial answer or ask you for further information. I aim to respond to you as quickly as I can but sometimes I may want to take a little time to consider your question so as to give you the best answer I can.

Expert:  JGM replied 5 days ago.

Transfers between spouses who have separated are exempt from CGT provided they take place in the tax year of separation. So if the house was transferred to your mother and it was her main residence she could sell it free of CGT. The HMRC guidance on this is here:https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-spouses-civil-partners-divorce-dissolution-and-separation-2016#separation-divorce-and-dissolution A Deed of Separation drawn up by your solicitor would be needed. I hope this helped you today. Please do let me know if I can clarify anything. I am always happy to help. You are always welcome to ask a follow up question if it will help you further.