Question asked by my client for family member......my clients sister's had long term partner (never married) who rented his residential property out. They moved in together living in the sisters house. Her partner declared the rental income on his tax return paying any necessary tax each year. The rental property was sold and the proceeds were gifted to the sister to pay off the mortgage on her property . The partner is not on deeds of the sisters property and had no other assets and gift was well below the IHT Sadly the partner took ill and passed away a year after the sale. HMRC have now written to the sisters address for attention of the executors/legal representatives asking for payment of CGT that they have calculated on the sale of the old house.
The question would be what happens in this instance when the deceased has passed gifted the proceeds to another party and has no other assets to pay the CGT bill. I dont want to spend unncessary time and expense reviewing the CGT aspect if HMRC has no legal authority in pursuing the sister for the CGT.