george swietlik

In 2015 we took out a loan and bought a larger house that was fitted with a lift so that we could accommodate both of our ageing mums and take care of them. Our original residence was a house that we bought in 1983 and its only now that we have managed to sell it. The price we got for it was less than the price it had been valued at and we originally put it up for in 2015! However, we have now incurred a CGT liability of 7/8 years on this property of some 40 years but the present taxation system only allows for 9 months before CGT becomes liable once the property is no longer your residence. Obviously, the base costs of 1983 have risen over the years but whilst my understanding is that Indexation Allowance was stopped in 2008 and prior to this it could be applied for computations in determining the prevailing asset values but was frozen circa 1998. Hence in the ownership of the original house for the last 40 odd years from 1983 to 2008, i.e. some 25 years Indexation was allowable whilst the last 15 years this is not the case. Without this mechanism, does this mean that there is no way to eliminate the effect of long-term inflation in the chargeable gains calculation? i.e allowing still for the effect of inflation on value of the property. due to changes in depreciating monetary value and/or inflation during that time? Because we have only now managed to sell the house, and insufficient time is allowed before CGT kicks in, does this mean we are now being disadvantaged by the long period of ownership? Is it therefore correct in my understanding that the present rationale does not differentiate between a gain made over a period of one year against the same notional gain made over forty years? George Swietlik