I was gifted my parents’ house in Apr 2014 at a value of 150,000 - 50% was owned my me with my sister owning the other 50%.
Both parents have now deceased. Due to a family breakdown (before both parents died) my sister does not wish to receive the proceeds of the sale. My sister transferred her share to me via the Land Registry and this formularised September 21; I now own the property 100%.
The house has been put up for sale with a guide price of £200,000 – valued by the Estate Agents / Surveyors. I have an offer accepted for 210,000 – yet to be completed. I own my own property, and I have not lived in my parents’ house since they gifted it - so I will not qualify for PPR. I am aware both my sister & I will be treated as ‘connected persons’ and the market value will need to be adopted even though the house was gifted 50/50 the transferred 100% for nil cost.
Minus usual deductions for costs, my sisters CGT gain will be I assume 75k to 100k (half the guide price as this would be adjudged market value) when she disposed/transferred her 50% share to me = £25,000
However, for my CGT, when the house is sold, I am unsure what figure to use for my purchase price/base cost as the 50% gift from my sister complicates matters.
For this query, lets accept the sale to be £210,000
1. Would I use the purchase price of £150,000 as the base cost i.e., as if I had owned 100% in 2014? Resulting in a gain of £60,000
2. Or will the base be £200,000 as this is the assumed market value at the point of transfer? Resulting in a gain of £10,000
3. Or will the base cost be apportioned to a new base cost i.e.
· Calc 1 value in 2014: 75,000 to value at transfer in Sept 21 at £100.000 (50% ownership) = £25,000 gain
· Calc 2 value in Sept 2021: £200,000 to 210,000 = 10,000 gain (100% ownership)
Total gain £35,000?
4. Like above, will the new base rate be the original value £150,000 + £25,000 (sisters CG gain) = £175,000. Resulting in a gain for me of £35,000
I appreciate point 3 or 4 are subtly similar but I have presented both with the capital account gateway in mind, in that, the form isn’t designed with this convoluted scenario in mind, so wondered if 3 or 4 is correct, would 4 be the best way to record it.
NB I have no CG losses to bring forward or entitled to letting relief - this is is my only CG event. I do not have a SA return and understand I will have 30 days from disposal to report though the new CG government gateway.