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Capital gains liability

394 views 3 replies

Hello all,

My father inherited some properties from his father (my grandfather) in the late seventies.  Last month my father transfered these properties to my name by way of a settlement deed.  The deed shows the values of the properties as decieded by the Governments fair value chart.

My question is, if I sell the properties next month what will be my CGT liability.

 

Will it be from the initial cost to my grandfather or will it be from the new declared fair value price.

 

In other words would I be liable for short or long term CGT.

 

And from which price will this be calculated.

Replies (3)
It will long term capital gain. Try to find the fair market value of the property in the year 1981.
Originally posted by : Mihir
It will long term capital gain. Try to find the fair market value of the property in the year 1981.

Thankyou, my auditor says as I only received the property last month it will be classed as short term capitral gain.

 

Unfortunately the property value in 1981 will be very low, probably only about .5% of todays value, is there anything else I can do to reduce liabilty, as I need the funds it would be difficult for me to hold on for another three years.

You have received this property as a gift and therefore the cost of this property shall be taken as cost of acquisition for your father which is in 70s. So to index the cost of acquisition, fair market value of the property on 1981 will be used in computing long term capital gain.


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