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Sam
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Category: Tax
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My grandmother transferred her house to myself (as a

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My grandmother transferred her house to myself (as a grandchild) and 3 other grandchildren in c. 2003. She passed away Nov 2017. We then sold the property and each of each received a payment via the conveyancing solicitor (e.g it was not a single payment to one grandchild and then divided). We did not charge my nan rent from the period of the transfer to her death so no income was received to the grandchildren during this period.In these circumstances would the payment fall into Capital Gains Tax?
If so is the individual threshold £10k?
What happens if a payment is in excess of £10k?As the property was transferred/gifted to the grandchildren by a solicitor more than 7 years prior to her death do these circumstances mean no tax is payable?

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

HI

 

She should not have had this considered as exempt for Inheritance tax purposes (so no never any capital gains) but pre owned asset tax for each year she remained living there and not paying any rent then disregarded as exempt as although more than 7 years had lapsed it was a benefit with reservation not a potentially exempt transfer so its liable for 40% Inheritance tax IF its full value plus the rest of her estate exceeded £325000 (as a sole exemption) or she may have had more exemption if she was the second spouse to pass away

 

Thanks

 

Sam

Customer: replied 13 days ago.
Would you be able to put that answer in laymans terms please

Hi

 

It is in layman's terms

1) as Grandma paid no rent she owes HMRC an annual charge called pre owned asset tax - link here https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm44000

2) No capital gains necessarily but Inheritance tax owed by the

estate and then maybe capital gains IF

3) From the date Grandma passed away to the date the property was sold any profit was made

 

Thanks

 

Sam

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