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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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My mother owns a house that is almost mortgage free it's

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Hi my mother owns a house that is almost mortgage free it's only got 15k left to pay on it. The house is worth 450k and she wants to add me to the property. I want to do some extensive work on it and she will be moving out so I will get a buy to let mortgage on it and release the equity to either turn the house into a hmo or flats. My question is will I need to pay a captial gains tax in order to take over the property if so how much? If she was to take herself out of the deeds and add a limited company in instead would that work out better for me?
Assistant: What are the assets or property for this capital gain?
Customer: It's a semi detached house
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: No that covers it thanks

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Although Capital Gains Tax (CGT) will apply to your Mother on part disposal of this property, Private Residence Relief (PRR) will relieve this at 100%.

Limited companies are not subject to the CGT regime, all such transactions being passed through the trading account and exposed to Corporation Tax (CT), currently 19%, dropping to 18% in April 2020.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 8 days ago.
Thank you for the reply. Would you be able to simply the response you sent please. I'm still confused on this.Scenario 1) if I was to have my name added to the property and then do work on the house bringing its value up to £700,000 would I need to pay anything? Or is the tax calculated at the time of when I was added into the property?Are you saying we wont have to pay any capital gains tax? Even if she moves out and we put the house on rent?

It would be calculated from the time you were added.

If you do that then you will have a possible CGT liability on disposal, but you nave a non-cumulative Annual Exempt Amount, currently 12K, to offset this.

Thank you for your support.