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CGT on Inherited Property

CGT on Inherited Property

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Hi all,

Giving current situation of CGT implication on Inherited Property, I appreciate if someone helps me here as I found it difficult to get this fact.

Client used to live in a property as married couple with his late wife in their main residency prior wife's death. Property was in her late wifes' solo name, also property in question was her private residency since 1950's until she died. Property was transferred into client sole name at probate value after deed of variation settled the estate of late wife by mutual agreement with her family as she died without leaving the will.

Reading through HMRC guidelines there is paragraph confirming that: 
"If a residence is transferred between a husband and wife who are living together or between civil partners of each other who are living together, whether by sale or by gift, the period of ownership of the transferee is treated by TCGA92/S222 (7)(a) as beginning at the beginning of the period of ownership of the transferor. This also applies where the residence is transferred from one to the other on death."

However TCGA92/S222 (7)(a) goes back-dated up to 31/03/1981 value of property. 

Question: Giving current situation, does TCGA92/S222 (7)(a) applies to my client ? If it does, would my client be deemed as owner of property since 31/03/1983 as he has inherited his late wife PPR and that taking back date as owner of property since 31/03/1983 ?

Many thanks


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By ACDWebb
21st Mar 2014 14:06

What have I missed?

what's the 'current situation of CGT implication on Inherited Property'?

Does he live in the property now and has he always done so? If so it seems like he acquire the whole share at PV & would be exempt on any gain arising. Looking at examples 7(a) might only be an issue if wife had not used the property as PPR for some period and that appears not to be the case, and certainly not since 31/3/1982 - which I think is the date you were meaning to reference

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Replying to DJKL:
By massky
17th Apr 2014 19:38



Hi ACDWebb 

Thanks for your help and aplogies for very late replay.

He wants to sell the property in question but he is not sure if he liable to pay CGT.

He did live in property with his wife as their PPR prior his wife death (as married couple) and than property was transferred to him after his wife death.              In May 2003 which in same month his wife died, he has moved to another property and never returned to this property. However, his wife lived in this property as her PPR since 1950's but HMRC can go back only up to 31/03/1982. If TCGA92/S222 (7) (a) applies in this case (which I think it does) than he will be inheriting his wife PPR since 31/03/1982. However there has being 11 years he has not lived in property, but he has lived before there for 21 years.

254 months resident (03/1982 to 05/2003) and 133 months non-resident (05/2003 until 04/2014)  

Based on this figures, is he liable to CGT when disposing the property in question ?




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