Avoiding tax when converting a property into two dwellings?
Question We have lived in our house for 35 yrs, my mother and I. I have converted the house into 2 dwellings and intend to have separate Leases on them. Will we be liable for CGT at any time? If so what is the best way to avoid this?
This question is not very clear, so I need to make some assumptions. I assume that the mother owned the whole house until they decided to split the house in two, at which point she transferred ownership of half of it to the child.
If so, there will be no capital gains tax liability, because principal private residence relief will be available on both halves of the house. The mother owned the whole house until the split, and lived in it. She owned and lived in her half after the split. The child owned and lived in their half after the split. So the conditions for the relief have been complied with and there will be no tax due.
Got a burning tax question?
Why not submit a tax question to our tax advisorsAsk a Question