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Sam, Accountant
Category: Tax
Satisfied Customers: 14153
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My sister and I are in the process of selling my father’s

Customer Question

My sister and I are in the process of selling my father’s flat and buying him another one near to my sister’sMy Dad gifted his flat to my sister and me in 2003 - although the trust assumed I think that we would realise the value of it when he died. We are however now going to sell it and in fact buy a more expensive property for him to live in rent free.When we sell it - do we have to pay capital gains tax on it if we use the money to buy the new property - our can we wait until he dies and then pay capital gains tax on the new property.
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.


Thanks for your question

Has your father been paying you market value rent in this existing property ? If not then although he has gifted it to you and you are liable to capital gains on its sale, it still would have been considered for Inheritance tax as he was still making use of a property he has gifted.

The same will apply with the new purcahse - unless he pays market rent to you and your sister - then even if its not in his name, it will be treated as his for Inheritance tax purposes and you again will be liable for capital gains tax on its disposal. (if this occurs prior to your father passing away at which point is just considered for Inheritance tax)



Expert:  Sam replied 1 year ago.

Also you cannot pay capital gains when the next property is sold, this is not a business asset so the gaina rises at the time the sale takes place on the current property