The property I currently lives in was gifted by my best friend about 10 years ago. As I am getting married soon and I wanted to either sell it or rent it out so I could move in to my other half.
Are there any taxes I need to be aware of before I make my choices? Any comments are welcomed. Thank you in advanced.
If you rented it out & later sold it then for CGT they would have to get a valuation of the property at the date it ceased to be your main residence. Then any gain would be the difference between that valuation & the price you sold at. There is no CGT for the period you lived in it so the fact it was gifted to you is immaterial.
One thing to add is that do I need to pay capital gain tax? But what would this based on since I never made a purchase? It was handed free to me thanks to my best friend.
It was your main residence so no tax if you sell it. If you rent it out the rents will count as income for tax purposes & if you later sold it there could be a charge to Capital Gains Tax. That was a good friend you had!
For Capital Gains if a disposal did not have an actual selling price (or was sold at other than market value) the Revenue would ask the District Valuer to provide a valuation at the appropriate date.
davebro -thanks for your replies, but can you clarify what you means by the appropriate date? Is this the date when it was gifted?
For Capital Gains if a disposal did not have an actual selling price (or was sold at other than market value) the Revenue would ask the District Valuer to provide a valuation at the "appropriate date".
If you rented it out & later sold it then for CGT they would have to get a valuation of the property at the date it ceased to be your main residence. Then any gain would be the difference between that valuation & the price you sold at.
There is no CGT for the period you lived in it so the fact it was gifted to you is immaterial.
I think it would be cleaner to sell it now so I maximised the money from the property.
If I am going to rent it out then, I will be paying income tax (which is reasonable as a tax payer). But if I decided to sell it on after I rented it out then I am liable for Capital Gain tax from the gifted date. Is this my correct understanding?
Yes - I wouldn't want to be a landlord in the current climate & you might have to spend money on it to bring it to a rentable condition with the necessary safety certificates.
The house should be your primary house
you have held it legally for more than seven years
as primary residence - there is no capital gains - (so long as all the facts given are provable and you arent in venezuela and you 'call it your home')
The nature of the transfer is vital - when you sell the solicitor will inform the tax authorities
(Let us call the transferor T - T needs to be no where near. He also if the house was NOT the primary residence, should have made a CGT payment at the time of transfer. these are issues for T - - you're not marrying T are you?)
I have a quote from a local solicitor for approx £900. The solicitor also states that my friend also need a legal financial adviser. Is this another independent solicitor?
I guess my solicitor won't engage with my friend to get the legal paper signed, except via my friend's legal financial adviser (solicitor?).
Sorry you have completely lost me.you say "to clarify" then go on to make things harder to understand! You are keeping the property gifted to you, and gifting another property to someone else?
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