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JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11154
Experience:  30 years as a practising solicitor.
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Scottish law. Many years ago my Aunie bought my grannys

Customer Question

Scottish law.

Many years ago my Aunie bought my grannys house for her and both, Aunites and Grannys names were put on the title deeds. Granny has now died and the house is now owned completely by the auntie.

The aunite is willing to sell the house back to the family at just below half the market value but has been told that she would need to pay capital gains tax on the market value rather than the discounted sale price is this correct? if so is there anyway round it, people have mentioned gifting the balance by "deed of gift" and otherways.
Submitted: 4 years ago.
Category: Scots Law
Expert:  JGM replied 4 years ago.
Thank you for your question.

If your aunt lives in the house as her only or main residence she would not have to pay CGT at all.

Happy to discuss further.

I hope this helps. Please leave a positive response so that I am credited for my time.
Customer: replied 4 years ago.

The auntie doesnt live there, hasnt since her youth, and it is her third owned property. Bought it for granny when my grampa died as the house came with his job and when he died the choice was to buy it or have to move out. So auntie bought it and both her and grannys names went on the deeds. Either way the property is being sold either to us (family discounted price) or on the open market at market price.

Expert:  JGM replied 4 years ago.
Unfortunately CGT will be paid based on the current market value even if the property is sold to the family at a discount. She may want to consider giving away the property in stages over a series of tax years so as to get the benefit of the personal exemption available each year. For example if the capital gain for arguments sake is £50000, she could give away 20% of the property each year so that the gain would be about £10000 per tax year, ie, less than the annual exemption.

This would properly be done by deed of gift drawn up by a specialist tax lawyer.