Hi All,
Will I have to pay CGT on sale of a property in the UK that I acquired from my father in law as a gift 3 years ago? My father in law is NOT a British citizen!
The property is being sold for £120k and on the completion statement when my father in law gifted it to me it says £54k for the gift. Also note that I took a mortgage out on the property for £55k to pay my father in law for the property.
I am very confused about the following:
- Am I liable to any CGT?
- if yes, what is my cost of purchase? Will it be £54k gift + £55k mortgage or only £54k gift amount??
Thanks!
Replies (9)
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Confused. If he 'gifted' you the property why did you have to pay him. Did he just gift you part of the property or what. Regards Peter
Can you please answer the questions
"Confused. If he 'gifted' you the property why did you have to pay him. Did he just gift you part of the property or what."
A gift from a non resident make no difference. What was the open market value of the gift on the day it was gisfed. Regards Peter
What you FinL paid as a result of the court case in not relevant. He must have been the legal owner prior to gifting the property to you so the gift will be deemed as the OMV. If you sold it for less then there will be no CGT liability.
What HMRC are referring to I do not know. I would put it in writting to them, the call centres are not a reliable source of guidance. Regards Peter
Simple, surely - you pay CGT on the sale price minus the market value at start, regardless of what it actually costs as it was a transaction between connected persons. The Revenue may query the market value and ask the District Valuer to give his / her opinion, if you disagree then you can get your own valuer in and leave them to sort it out between themselves.