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 bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4964
Type Your Tax Question Here...
bigduckontax is online now

Good Afternoon, I bought a council house for my Mum and

This answer was rated:

Good Afternoon,
I bought a council house for my Mum and her husband in July 2007 with the remainder of my divorce money. . As it was a council house I was not able to transfer the house into my name for 3 years which I did in February 2011. My Mum's Husband died and my mum went into a nursing home in October 2012. I have just sold the house and now need to know what my situation is with Capital Gains Tax. My Mum and her husband did not pay any rent to me. My main residence and the one I have just sold is in Edinburgh Scotland.
Hello Jan, I'm Keith and happy to help you with your question.
You will, as you are aware, be liable to Capital Gains Tax (CGT) on the gain on the sale of this property. Take the purchase price plus costs and add any improvement costs, but not maintenance, to derive an acquisition price. The net selling price (sale receipts less costs of sale) now has the acquisition price deducted to compute the gain.
Unfortunately dependent relative relief effectively died in 1988 so the whole of the gain is taxable. However, you do have an Annual Exempt Allowance (AEA) of 11K to offset any gain. The balance of gain less AEA is then taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the year of sale. This tax is payable by 31 January 2016 and the gain should be declared on your 14/15 annual self assessment tax return.
I do hope I have assisted you in this matter.
bigduckontax and 2 other Tax Specialists are ready to help you
Thank you for your support.
Customer: replied 3 years ago.

Thank you for your answer. I don't need any further questions answered thank you

Delighted to have been of assistance.