Polyolefins such as polyethylene undergo slow degradation when placed in air. Degradation occurs by reactions with atmospheric oxygen that lead to the formation of carbonyl groups (groups containing oxygen), gradual….
In November 2002, Gerald gave his home to his son, Stuart. At the time, it was valued at £160,000.
In November 2002, Gerald gave his home to his son, Stuart. At the time, it was valued at £160,000. Gerald carried on living in the place and did not pay any rent to Stuart, so this counted as a gift with reservation. When Stuart died in July 2009, the house – by then valued at £210,000 – was treated as still being part of his estate and inheritance tax of £84,000 was due on it. Following his dad’s death, Stuart decided to sell the house. In the depressed housing market, he was lucky to get the full £210,000 asking price. He had assumed because the house was part of Gerald’s estate and there is no capital gains tax on what is left on death, that there would be no capital gains tax bill on the sale of the house. However, Stuart had a nasty shock. Under the tax rules, the gift of the home in 2002 was valid for capital gains tax purposes. This meant Stuart, who had never lived in the property so could not claim any main-home exemption, was treated as having made a capital gain of £210,000 – £160,000 = £50,000. After setting his tax-free allowance against this, he was left facing a tax bill of (£50,000 – £10,100) × 18% = £7,182.