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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
First point, in which part of the UK does your father live?
Secondly, he has only 325K tax free in his Inheritance Tax (IHT) affairs unless he has inherited his late spouse;s unused tax free portion. Please confirm that this is the case.
You have still not told me in which part of the UK he resides. Devolution has had a significant effect on the position.
Just Answer has gone doolally again and will not let me edit; please ignore my last post
You are correct in your surmise regarding Capital Gains Tax (CGT) on any gain made on the sale of the rented out house. The gains is the difference between the selling price and the acquisition price. The former is net ie after deducting selling costs including advertising. The acquisition cost is the price paid for the house plus purchase costs including Stamp Duty, plus improvements eg installation of double glazing, central heating, extensions etc, but not routine maintenance which can be used to offset rental income. The sale would also attract the Non cumulative Annual Exempt Amount (AEA), currently 11.3K, and, if he occupied the house before or after the letting period, Lettings Relief (LR) up to 40K. These reliefs offset the gain for CGT.
I cannot see how gifting deprives the estate. It does, of course, but so what? It is his estate so he is entitled to dispose of it as he wishes. Whether his daughter is entitled to exercise such powers is a moot point. If he is still compos mentis then his instructions should be sought to be on the safe side. When my mother went initially into a home we sold her house for her at a competitive price. I took the contract to her for signature. Her comment was 'Oh, do I own a house, well I won't need that now I am living here,' which I thought was ample proof of sensibility. In the end, many years later, the capital sum was still intact in her building society accounts at her decease.
I do hope that you have found my reply of assistance.
Correct, let sleeping dogs lie.