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What would my daughter's, mum's and my tax liabilities be?

Question I would like my daughter to buy my home, gifting her £40,000 of the equity so she doesn't need a deposit. My mum would like to sell her home and give the profits of the sale to myself and my brother.  What would be the implications of this, as she is 89 and would be coming to live with me in Spain. She receives a state pension, a part pension from my late father and then receives pension credit. My daughter owns a property - which she intends to sell in about two or three years. Would she pay capital gains on this or any other form of tax owning two properties? I intend to use the money from the sale of my property to my daughter to fund a house purchase in Spain - what taxes would I be liable for?

Arthur Weller replies:
If your mother has lived in her home as her main residence all the period of her ownership of the house, then there shouldn’t be any capital gains tax when she sells, due to principal private residence relief. If she lives for seven years after gifting the money to you and your brother, then there will be no Inheritance tax (IHT) on the gift, but if she doesn't, then most likely when she dies there will be IHT, depending on the amount in her estate. When your daughter sells her property in two or three years she will not pay any capital gains tax if it has been her main residence, as above. The same applies to you when you sell your home to your daughter.

Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

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