My sister and I were left a house by our parents, valued at about £120,000. It is my principal private residence (PPR) and I've always lived in it. My sister has always lived in London in her own house. I am moving house now and selling the house we were left. My sister wants to give me all the proceeds (i.e., her half) to help me towards my next house. Do I have to pay any capital gains tax (CGT)?
Arthur Weller replies:
You do not need to pay any CGT because, since you have always lived in it, it qualifies as your PPR. But your sister will have to pay CGT. The base cost for her half of the house will be half the probate value of the whole house when you inherited it from your parents, e.g., half of £120,000.