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Thanks for asking for me and apologies for the delay in my response, I did not see the question listed within the UK tax forum until today.
Do you still wish to proceed with this question?
I am out this morning with clients, but will review this, should you still require a response, this afternoon
do you have an idea when you will be able to give response
Sorry for the delay, I was caught up on my return yesterday.
The capital gain position would be as follows -
The initial gain (using the rebasing value of £32,334,but I would arrange to get a proper valuation from the valuation office) would be £217,666 from which you can deduct £250 for the sale costs, and I am afraid only capital costs for 4,5 and 6, (as you have no receipts for 1, 2 or 3) which total £4300
This leaves a gain of £213,116
Private residence relief, would be due as follows
Purchase date 1966 to sale date (approx. Oct 2013) total ownership period 570 months
Period of time it was the main residence from April 1966 to Aug 1988 - 26 months which is added to the last 36 months of ownership for private residence relief, so a total period of 62 months
So to calculate the private residence relief £213,116 x 62/570 = £23,181
This is deducted from the gain leaving £189,935
Next private residence relief is considered
This is the lesser of
1) The amount of gain on which private residence relief has been applied - £23,181
2) The amount of gain left over after private residence relief has been applied - so £189,935 OR
As the lesser is 1) the amount of gain on which private residence relief has been applied - £23,181 this is deducted from the remaining gain of £189,935 = £166,754
This is then split 50:50 between your parents - so a gain of £83,377 each
For your Dad - his first £10,600 is exempt - so £72,777 is the gain - of which approx. £21,965 would be liable to 18% (although this will be a little more, as not a whole year of rental income will arise) and the remaining gain at 28% - so capital gains of £18,181.60
For your Mum, again the first £10,600 would be exempt - and the first £25,947 would be liable at 18% and the remainder at 28% - so capital gains of £17,782.80
Thanks for your response. I have been looking at the HMRC Fact sheets in relation to CGT and most notably Fact sheet 283 on private residence relief.
The eriod of ownership should start from 1982 Rebasing point and not purchase date of property. Please see page 3 /4 of fact sheet.
You appeared to have made same mistake in a previous question i asked. I am afraid this appears to be quite a fundamental error
I do apologise, I shall opt out and let another expert help you.
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