Obviously a higher base/acquisition cost reduces the gain and thus the tax.My question relates to CGT. If he as the new owner sells it in 10 years time after a gain of 100k is it nit better to accept the higher valuation now ?
My question relates to CGT. If he as the new owner sells it in 10 years time after a gain of 100k is it nit better to accept the higher valuation now ?
Only if it correctly reflects the current market value.Obviously a higher base/acquisition cost reduces the gain and thus the tax.
Only if it correctly reflects the current market value.
The estimated fair market value in question has been determined by a valuer so I can't see how there would be any issue with it.In the computation of a Capital Gain or Loss on the disposal of a property, if its original acquisition was between connected parties or otherwise not at arm’s length, there is an obligation to use its applicable market value at that date.
Other posters have indicated above how valuations may deviate from actual market values for various reasons, for example if the valuation inflates the stated value of a property because the owner is mindful that a hoped-for future CGT saving will outweigh a marginal additional Stamp Duty cost.The estimated fair market value in question has been determined by a valuer so I can't see how there would be any issue with it.
The connected parties are your relative and their son.They took a random local auctioneer and asked for a valuation. They are in no way connected. They did not deal with the auctioneer directly. It was through his secretary. The auctioneer based their estimate on the recent sale of a similiar 3 bed house in the town.
Where do you obtain the applicable market value for a property that was transferred between family members over 23 years ago? A property was transferred in a will in 1999 and is now for sale so how do you go about getting the accurate market value for that property in 1999 so you have a figure to base the gain on for CGT calculations?In the computation of a Capital Gain or Loss on the disposal of a property, if its original acquisition was between connected parties or otherwise not at arm’s length, there is an obligation to use its applicable market value at that date.
An experienced professional valuer should be able to oblige, on the basis of data and local knowledge from back then.Where do you obtain the applicable market value for a property that was transferred between family members over 23 years ago? A property was transferred in a will in 1999 and is now for sale so how do you go about getting the accurate market value for that property in 1999 so you have a figure to base the gain on for CGT calculations?
This is an important point.Have they taken advice on this?
There seem to be life interests and remainder interests involved here, plus connected party issues.
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