CGT on disposal of house

My parents bought a house in 1979. My mam left my dad in 1983 and lived with my grandparents. She inherited their house last year where she resided since 83 and still resides there. My parents lived apart but never actually legally separated or divorced.

My dad passed away thus year so the house is legally my mams straight out. She wants to sell it so I am wondering the tax implications for her on any gain made. I know the original price will be indexed and she'll be subject to cgt on the diff between this indexed price and the selling price. I know there is an exemption where a PPR is sold and cgt would not be payable.

My question is how do they assess it is a PPR? How would the revenue know it wasn't her PPR- is there a declaration she'd have to fill out once she sells the house? Thanks in advance. o

Well in the first instance it probably depends on whether Revenue know that your parents were "married but living apart" - that is the box that either or both of them may have ticked on any correspondence with Revenue in the past 30 years.

In any event, she should just do things right.

Did she own half the house with your Dad all along, in which case she only inherited the other half last year? If so then she will have inherited that half at its market value at the time, so would effectively only be liable to CGT on the other half of the house that she had owned all along, less PPR relief for the period from 1979-83 plus the last 12 months.

So the absolute maximum she could owe in CGT on a sale should be around 10% of the sales price. Surely worth it for the peace of mind of knowing that you don't have a ticking tax timebomb.

Thanks Mandelbrot. Yep they bought the house jointly in 79 and my dad lived in it when my mam left him. They never did anything legally at all re a separation etc and my mams name has always been on the deeds.

So am I right in saying that the gain liable to tax would be half the sale price of the property minus half the original purchase price indexed at the applicable rate. My dad's half of the house is not a gain as mam inherited it at the current marker value that she'll be selling it at? Does the cgt return form facilitate this sort of calculation etc?

The CGT form requires very little information - the proceeds on sale, and the amount of gain liable to tax.

I would have thought that as his spouse, the asset should pass tax free and thus any sale of the property not be subject to CGT?
Or is the suggestion that as house was jointly owned, was not the mother's ppr for the period between 1983 and now and so CGT payable as a result? If this is the suggestion, would the calculation be on the 50% owned by the mother only as the 50% owned by the father was his PPR and passed to spouse automatically on death
Those suggesting tax is payable, can you clarify your workings?