On Sat, 09 Mar 2013 21:58:34 +0000, The Natural Philosopher wrote:
The inheritance is tax paid so any CGT will be only be due (when selling)
on anything positive from the "aquistion" price and the selling price.
This might take quite a while in the current markets to get bigger than
the CGT allowance... That's assuming this house doesn't become your
primary residence as they are CGT excempt...
Everyone ought to be planning how to reduce the amount their estate has
to pay to HMG, but many don't. What are you going to do with the house
before you sell? Live in it, second home, rent it out, or just take stock
and sell soon? Have you any kids? Might be worth passing it on to them if
your estate(s) are already banging into IHT.
It can get complicated depending on what assets are already held and
whose name(s) those assets are held by. "Tennants in Common" I think is
the legal phrase, means that the property automaticly passes to the
survivor without being part of the deceased estate but it does then
become part of the survivors estate, which might not be the best thing if
they have a significant estate of their own. Also there are legal
definitions of who is decreed to have died first and thus how things
shift if you are both die at the same time.
But not just any accountant, one specialising in personal tax is required
and the solicitor needs to know about personal affairs, Wills, Lasting
Power of Attorney, etc
It's not so much complicated as lots of gotchas that vary depending on
On Sat, 09 Mar 2013 23:56:26 +0000, Dave Liquorice wrote:
'Tenants in Common' means that husband and wife each own (usually) 50 percent of
the property, and that
share forms part of their individual estates. Each can will that share to
whoever they want.
'Joint Tenants' own the whole house between them, such that on the death of one
of them the other
automatically inherits without it becoming part of the deceased's estate.
If the object involves minimising CGT and IHT, then professional advice is a
must. If the object is to let the
property, that adds another layer. Given the value of the house, and the
severity of the possible pitfalls, the cost
...and the % ownership can be varied according to individual
requirements; eg so if two individuals own a property they wish to sell,
they may wish to make it 50% each to use both of their CGT allowances;
whereas if they are letting the property out, and one of the owners has
a higher tax liability than the other, then it may make sense to have
the ownership proportions, say, 99%:1% (all other thing being equal,
IANAL, etc etc)
To add to this: the land registry records which of the above two
scenarios the property is held as. If the property is held as "tenants
in common" the record doesn't include the % proportions, and these can
be very simply varied by a deed, ie without having to go back to the
Land Registry again. Useful in the scenario above eg where a jointly
property is to be let out, and sold at a later date.
Posts over the past several years show they have and that they know what
they're talking about. Which is the reason why I said 'there's a wealth
of relevant experience and expertise in here' and why I made the enquiry.
I would recommend professional help with this but NOT a solicitor but a
financial advisor. Solicitors are rarely qualified for all aspects of
tax although you will require one to draw up and legalise your solution.
Thanks for the helpful suggestions: appreciated.
Just to bring things up-to-date, the house will probably be let,
Management hasn't issued divorce papers (yet!), I've reposted to u.l.m
and I'm seeing a solicitor tomorrow.
The reason for the questions was to give me a feeling for questions I
might want answered by him and to check to see if I'd missed any options
that might be better than the ones I'm considering.
As has been pointed out, in the present market CGT isn't likely to raise
its very ugly head but I'm trying to cover as many eventualities as I
can in one go.
My experience has been that solicitors, even if they are tax savvy,
usually avoid suggesting tax avoidance measures. A financial advisor -
who will want a fee - is more likely to talk about the range of
possibilities and then the solicitor will comment/advise on the risks
associated with each.
Owning two properties are quite likely to take you and your wife over
the IHT threshold on the second death. If you are letting it out, there
could be less income tax arising from the rent, it is is in the name of
the lowest tax payer. If the rent would take either of you into high
rate tax, then it might be that equal ownership and splitting the
taxable income equally could keep you both below the high rate threshold.
Unfortunately, I don't entirely agree. Whilst most solicitors lack the
specialist tax knowledge, in my experience, most IFA's also do but
won't admit it and try to exploit the client by offering a range of ,
potentially inapproriate, products/advice.
I am sure that there are knowledgable IFAs, knowledgeable solicitors
and knowledgeable accountants but finding them is not easy.
Please reply to group - email address is not monitored
I'm fairly sure that the 'starting year' and 'ending year' for CGT can be
adjusted, depending on carried over/
carrying over allowances. It might not be the only relevant factor.
What is clear is that CGT isn't a straightforward x% of A - B; how you get to A
and B is also important.
This is why I said upfront that paid-for professional advice is important.
(scroll down to Capital Gains Tax).
On Mon, 11 Mar 2013 14:29:03 +0000, stuart noble wrote:
Then they might have grounds to sue the adviser, or complain to their
professional body, among other things.
To take a chance on what internet posters might say about such a complex set
(for ordinary people) of tax
circumstances is in my view very unwise indeed.
What do you suggest the OP does?
HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.