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bigduckontax, Accountant
Category: UK Tax
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My wife and I are selling a second home bought in 1995 in which

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My wife and I are selling a second home bought in 1995 in which we have not lived but it has been occupied rent free by my mother since 1999. Does this affect the CGT payable?
Hello, I'm Keith and happy to help you with your question.

Unfortunately, not at all. The rules for dependent relative occupation are as follows:

'Occupation by a dependent relative

Where a dwelling was occupied by a dependent relative at 5 April 1988 and the relative continues to live there, the property will attract main residence relief on a sale when that residence comes to an end, by virtue of section 226.

A dependent relative is defined as ‘a person incapacitated by old age or infirmity or a widowed mother (no matter what her age or condition). This provision was abolished from 6 April 1988 but remains in place for persons in residence then.'

As your mother does not appear to have been in residence at 5 April 1988 it would not apply unless, of course, she had lived there before 1999 under other arrangements.

Unfortunately CGT will be payable on the gain on sale. That's the difference between the sale price less costs and the buy price plus costs.
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