I am trying to establish whether a pre-owned assets charge applies to my clients. Mr and Mrs sold their house in 2008 for £200,000. They used £100,000 of the sale proceeds to build themselves a bungalow in their daughter’s garden. Mr and Mrs have been living in the bungalow since 2008.
No change was made to the legal title of daughter’s house to reflect the new property so on the face of it the bungalow belongs to daughter.
My reading of the legislation suggests that this will not fall within pre-owned assets regime as the money was used to improve daughter’s property and not for the ‘acquisition’ of property which seems to be the requirement. It also does not seem to be a GROB as the gift was of cash not land.
I think this would be a PET of £100,000 by Mr and Mrs to daughter but would welcome opinions?
Sarah Hickson
Mowbray Woodwards