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Sam, Accountant
Category: Tax
Satisfied Customers: 14195
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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In 1968 I bought a house jointly with my father. I lived in

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In 1968 I bought a house jointly with my father. I lived in the house for two years. I sold the house in June 2013.
My dependent mother and father lived in the house rent-free and with no other considerations from March 1983.
My father died in April 1995 and left his share of the house to me in his will. My mother lived in the house until June 2013 when she was transferred to a residential home. When I sold the house last year the deeds were in my name only.
Question: Am I liable to pay capitalgains tax ?

Thanks for your question and for requesting me.

Yes there will be some capital gains, although the time you lived there will allow 2 years of private residence relief, and the fact that your parents moved in prior to 05/04/1988, there may well be scope for dependents relief, as long as the following conditions were also met -

•The dependent relative must occupy the dwelling house rent free and without any other consideration, see CG65600+.
•Only one dependent's dwelling house can qualify at any one time, see CG65660.
•A husband and wife or civil partners of each other who are living together can claim relief for only one such dwelling house between them, see CG65590+.
•The dwelling house must be the sole residence of the dependent relative, see CG65660-CG65661.
•The dwelling house must have been acquired before 6 April 1988 and the conditions above fulfilled in relation to a dependent relative before that date, see CG65670+.

You do not advise what the property was used from between 1970 and March 1983. So there would be a capital gain position potentially arising here, but if you rented the property out AND declared the rental income to HMRC, then private lettings relief is due - which allows up to a maximum of £40,000 further relief.

Also note that you only owned a proportional share of the property until your fathers death - (Im assuming 50% share with your father) which will allow just a full share from 1995, so you may find the gain is not as large as you might fear.

Plus the first £10,900 is your annual exemption allowance.

I am due to meet with clients now, so if you have any response, I shall deal with this as soon as I am available (no later than 1pm)


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