Client X bought house for £11000 in 1974. In 1979, X's mother buys the other half for £10000 as joint tenants.
MV82 £27000
IN 03/04, X's mother dies and X inherits her share at probate value of £70000.
IN 9/04 X transfer half share to wife, W as joint tenants. In 10/04, X dies and W inherits his share at probate value of £80,000.
W now wants to gift house to daughter D. What is the base cost?
Lina Bolton
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Replies (3)
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Let's see if I can track this one.
I'm assuming the 82 market value of £27k is of the whole property. Indexation to 5/4/98 lifts that to £55,270
Therefore as at 03/04, X has a property with indexed base cost of (55,270/2 + 70,000) £102,635.
Gift to wife in 9/04 is at Nil Gain Nil Loss, so her base cost for that half is £51,318.
Death of X uplifts his half to probate value, so her base cost for the second half is £80k.
Therefore by my logic her base cost for gift now is £131,318.
EDITED to correct figures: like an idiot I didn't halve the indexed 82 value at 03/04!
Or £128,818?
Seems to be arithmetic error in Andrew's reply (most unlike him!) £55,270/2 + £70,000 = £97,635. Base cost then becomes £128,818.
Oooooops!
David is quite right. £128,818 it is.
(I typed 75k into my calculator as 1st probate value rather than 70k. Grr.)
All I can say in my defence is that I'm a concepts person not a numbers person... ;)