Selling a house

[waltekar]

We are selling a house for �140,000, will we have to pay any tax on this please?

[warpig3]

Depends, are you an MP?


Seriously though, is it your main residence? If so then you are not liable to pay tax. If it is a rental property that you own then you will be liable to pay Capital gains tax on the profit you have made.

[waltekar]

No, it is not our main residence. My parents were living in this house, both passed away now but the Deeds were in mine and my husbands names. We received a peppercorn rent from my parents - approx �28.00/month, with no proper rent book or anything like that.

[warpig3]

Hmmm.... you may need to speak to a solicitor.

My understanding is that as a couple you will be allowed �18k tax free on the profit then you will be liable to pay 20% CGT on the remainder. This is if it is a proper rental property.

If, for instance, your parents signed the house over to you and your husband years ago then the above may not apply but I am not sure.

Definitely speak to a solicitor.

Good luck.

[waltekar]

Ok, thanks. Will do that. We will probably get a tax demand before I get a response from a Solicitor - all these MP's expenses will have to be covered somehow!

[buildersmate]

I don't think you will find it generates a tax demand automatically - you will have to declare it as a capital gain on your (and your partner's) tax return (assuming the house is joint held).
You will each pay a capital gains tax, not on the whole �140k, but on one half of the value enhancement from the valuation at the date it became yours to now.

[waltekar]

Many thanks 'buildersmate'. I have never received a Tax Return to fill out and my husband has stopped receiving them, since he took early retirement, so unless we are asked, guess we will keep quiet about it.

[warpig3]

Have a read at this, toward the end of the page. Might be of some help. I was actually looking at something for myself but think this may be of value to you.

http://www.which.co.uk/advice/capital-gains-ta x-explained/capital-gains-tax-and-property/ind ex.jsp

[madmaggot]

Was this originally your parents house or did you purchase it? If it was theirs and they signed it over to you, was this more than 7 years ago? If not inheritance tax may be due.
You may need to ask for a tax return; to just keep quiet is tax evasion, not recommended. You will need a solicitor when you sell so ask for advice fregarding tax when/if the sale goes through.

[waltekar]

Thanks to you both, warpig3 and Madmaggot. I did read your link warpig3 but I think the best answer is to speak with the solicitor as it is not so cut and dry as it appears and we don't want to be caught for tax later on.

Once again thanks to you all.