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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Myself and two other siblings jointly purchased our parental

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Myself and two other siblings jointly purchased our parental home over a number of years - with a 25% ownership each including my Mum. My brother and my Mum were formally on the mortgage deeds. Since my Mum died last year, my brother paid me the quarter value share. Finding it very difficult to understand my Capital Gains position. I am a UK tax payer.
Hi. Can you explain exactly how you bought a share of the property over a number of years. How did that work? Who were you buying it from?
Customer: replied 2 years ago.
A mortgage was taken out by my brother and mother. The total cost was divided by 4 and my sister and myself paid a standing order a quarter cost of the monthly mortgage payment into my brothers bank account. The mortgage payment was debited from his account every month. The mortgage was fully paid about 18 months ago.
Customer: replied 2 years ago.
My brother has retained a record of our standing order payments from our respective banks.
Thanks. Leave this with me while I draft my answer. It will take a while so please bear with me.
Customer: replied 2 years ago.
OK thanks. My brother has since paid me a cash payment of the 1/4 value of the house shortly after the death of my Mum. It is not clear if I should declare this a a capital gain or if my taxation liability is some other form. As part of probate my brother detailed the arrangement and notified HMRC of our position. He never received any comment either way.
When the mortgage was taken out to buy the home, who was it bought from?
Customer: replied 2 years ago.
It was a right to buy purchase from the local council.
Customer: replied 2 years ago.
I think 1990 but I will check
Customer: replied 2 years ago.
Jan 1987
Thanks. That's what I thought.
You effectively bought a 25% share when it was bought from the council. That share cost 25% of the purchase price.
You received one quarter of the value of the house when your mother died. So, your gain is your share of that value less the cost of your share as described in the previous paragraph. The first £11,000 of your gain will be tax free assuming you were paid your share in the 2014/15 tax year. Take a look here for information on CGT:
What happened to your mother's share of the property?
Customer: replied 2 years ago.
She left a quarter share to her 4 children - the three mortgage contributors and my sister who opted out of the joint purchasing decision for the mortgage.
Customer: replied 2 years ago.
That is 1/16 to each child
The "cost" for CGT purposes of the 1/16th share you acquired on your mother's passing will be it's value when she died, ie 1/16 of the value of the property.
Customer: replied 2 years ago.
My mother died in December 14. My brother paid my 1/4 share in May 15. Should my gain be declared for the current taxable year (online submission at the end of this month) or is the gain viewed as payable for the next tax year?
Was the property sold or did your brother buy you out?
Customer: replied 2 years ago.
My brother has not sold the property
Customer: replied 2 years ago.
He bought me out of my share
So, as your brother bought you out in May 2015, your disposal occurred in 2015/16 so you don't need to report it until you complete a tax return for the 2015/16 tax year which isn't finished yet?
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Customer: replied 2 years ago.
OK thank you. Your advice has been very helpful - whilst no one wants to pay tax I definitely would not want to be in breach of any due payments with HMRC. I was rather worried that our informal arrangement from 1987 might have left severely exposed during the coming tax year. Thanks again .
It shouldn't do. It's clear what the intention was from the outset as you contributed to the mortgage payments. Take a look here to see if you qualify for any relief from CGT: