UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.
I will need to know the value of the property when it was gifted to you in 1989, the cost of any capital laimprovements made to it and what the market value is now before I can advise you on the CGT position. What are the annual incomes pre-tax of the tow brothers who are selling up?
The two brothers who are selling will be treated as having received full market value as you are all connected for CGT purposes.
If you each receive £36,667, you will each make a gain of £16,667 (£110,000/3 - £60,000/3). The first £11,100 of the gain for each of you will be tax free. That will leave you each with a net taxable gain of £5,567 on which you will each pay CGT at 18% or 28% or a combination of the two rates depending on the level of your respective incomes. So, the CGT charge will be somewhere between £1,002.06 (18%) and £1,558.76 (28%). Take a look here to see how much of the gain will be tax each rate.
I'm assuming that your parents continued to live in the property and if that was the case, the gift of it to you was a gift with "reservation of benefit". That means it will have stayed in their estates for Inheritance Tax purposes unless they paid you a full markert rent.
I hope this helps but let em know if you have any further questions.
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