Sale of House

Sale of House

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Parents gifted a house to their 4 children in 1992 but lived in the house until they died. Not sure if a reservation was legally made at the point the house was gifted. The surviving parent died in 2011 and the house was sold in 2012. One of the 4 children made a deed of gift for her share of the property to her 2 children approx 1 year before it was sold. What is the capital gains tax situation for each person and would hold over relief apply to the second deed of gift. No application for hold over relief was made though.

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By gbuckell
26th Jul 2013 10:45

Not tax efficient

Gift to children at market value in 1992 - no CGT because of PPR relief (presumably)

A gift with reservation so should have been included in the estate for IHT purposes (but perhaps not over the nil rate band).

Gift of a 25% share in 2011 is also a disposal at market value with base cost from 1992. No holdover relief available.

Sale in 2012 also taxable with base cost from 1992 except for the 25% share which uses the base cost from 2011.

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By Polly1961
28th Jul 2013 11:10

Thanks for that you confirmed whatI thought

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By taxhound
28th Jul 2013 13:40

GWROB unless...

The parents paid a full market rent to live there... unlikely but you never know.

 

CGT as above either way.

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