Capital gains tax

[damnandblastitagain]

Having an issue with my infamous neighbours and need to liaise with the actual owner.

The odd parents used to own house. They said they had to sell it before the end of the last tax year "to avoid Capital Gains Tax". Could that be correct (they inherited it originally)?

They sold it for a vastly reduced price to their adult daughter.

I wondered;

1. on a house worth £680000 that they inherited, how much is the CGT that they were trying to avoid paying?

2. Parents now insisting the daughter is still not the owner and I will have to liaise with them over a party wall issue. They are notoriously odd and difficult to deal with and they fall out with everyone, so I would rather deal with the daughter.

I asked to do that - to deal with the actual owner - and they're now saying they still own it.

I think that isn't true. How can I find out for sure? I bought the HM land registry deeds and it lists them as owners end of June....surely if they had to sell by 5 April it would have come through by now?

Sorry for double post, it said it couldn't upload the first time.

Land registry have a huge backlog. I made a change to my deeds last year in April and in March this year it still hadn't updated, so my solicitor had to put in an expedite request, as couldn't remortgage without the change. Can literally take ages

You only pay GCT when you sell an asset. You pay it at the rate the government set on a defined sum. This takes into account CGT relief and maintenance. Therefore if it was worth a sum of money 10 years but is, when the calculations have been done, worth enough now to attract CGT on the gain they have made taking into account annual relief etc, then yes, they may have disposed of it for that reason. That is of course their business.

They might also have gifted the house to their DD. This would be to swerve IHT if it’s not their prime residence. Of it might be something they just want to do.,Again it’s not your concern.

What you really want to know is who the owner is. Write to all of them? All bases covered? However if Land Registry says it’s then how can you know any different?

@My0My

You only pay GCT when you sell an asset. You pay it at the rate the government set on a defined sum. This takes into account CGT relief and maintenance. Therefore if it was worth a sum of money 10 years but is, when the calculations have been done, worth enough now to attract CGT on the gain they have made taking into account annual relief etc, then yes, they may have disposed of it for that reason. That is of course their business.

They might also have gifted the house to their DD. This would be to swerve IHT if it’s not their prime residence. Of it might be something they just want to do.,Again it’s not your concern.

What you really want to know is who the owner is. Write to all of them? All bases covered? However if Land Registry says it’s then how can you know any different?

Not correct. A chargable event for CGT purposes is any transfer of property, even by gift. So parents transferring to child will have to pay CGT unless eg they can claim PPR relief.

As for OP's original question: on a house worth £680000 that they inherited, how much is the CGT that they were trying to avoid paying?

You might as well ask how many sweets are in a jar you have stored in your cupboard. Go to the HMRC site that lets you carry out a CGT calculation and you'll see how much information you lack.

Do you pay CGT on your main dwelling if you give it to your child? I thought not. It’s not sensible but I thought you could do it without CGT.

No. I’m wrong! Oops. Many apologies. At what point is the property valued to assess the gain? £0 cost to owner or valuation on when owner inherited?

@My0My

Do you pay CGT on your main dwelling if you give it to your child? I thought not. It’s not sensible but I thought you could do it without CGT.

Provided you don't have another dwelling that you've elected to be your main residence for PPR relief then any gain attracts PPR relief. But given that OP says they transferred to daughter to avoid CGT one would have to assume that they could not claim PPRR.

Anyway, I fail to see how anyone could be so invested in the financial affairs of their neighbours.

Well I thought that too. She only needs to serve a party wall notice!