C,g tax
Comments
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hi Yorkshire 99 are you saying they are responsible for all CGT and penalties ? . because it looks like they would want every body to pay out of the estate fund . could they have put this right when they swore the oath many thanks0
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What I am saying that if, as seems to be the case, they were negligent, then they are personally liable to the estate for any losses incurred because of that negligence. Having said that if they start behaving responsibly and try and unscramble the mess they have created then this will minimize the scale of the losses. The ball really is in their court. Ther extra costs of sorting out are their responsibility.charlie2015 wrote: »hi Yorkshire 99 are you saying they are responsible for all CGT and penalties ? . because it looks like they would want every body to pay out of the estate fund . could they have put this right when they swore the oath many thanks0 -
We are going through a similar process, though we have had to pay IHT.
We used the average of 3 estate agents figures to value the property for IHT and submitted this, with all other assets and exemptions on forms IHT400 and Supplements.
HMRC referred our property valuation to the District Surveyor, who approved it. HMRC then signed off the tax due, which we paid, and obtained Probate.
This took 6 months. We spent the winter clearing the house and preparing it for market, and put it on the market in the spring, found a buyer in the summer, and hope to Complete the sale shortly.
So about 18 months from the date of death. No, as Executers we have not been 'incompetant' and don't need 'our backsides kicking'!
Assuming all goes well, we will be selling the property for around £100K more than the probate valuation, so Capital Gains Tax will be due.
We did not 'deliberately under-value' the property, we took the best figure we could, which the DS agreed with. Whether prices have risen, or we've been lucky with this buyer, or we were mistaken with our original figure I don't know, but that does not make us 'personally liable' for anything. The Estate will declare the capital gain at year end and pay what's due.
If anything, the Beneficiaries should be pleased the property is selling for more than it was valued at 18 months earlier.0 -
.....The Estate will declare the capital gain at year end and pay what's due.
Quick question - do you mean that you will put the capital gain through as though it is a gain of the estate rather than the beneficiaries?
The reason that I ask is that if the residue of the estate has been ascertained, HMRC consider that the period of administration has ended and the beneficial ownership of the house lies with the beneficiaries. This effectively means that each residual beneficiary declares their gain and can use their own CGT allowance and rate.
HMRC's definition of the when an administration ends is quite different to what a layman would think! See helpsheet 282 for more information.
If there is any doubt, a simple 'deed of appropriation' can be drawn up where the executors basically pass the beneficial ownership to the beneficiaries and then sell the house as bare trustees. Then each beneficiary can use their CGT allowance for their share of the gain.0 -
Without knowing the detail it is hard to say more but executors have a year to deal with everything. To take six moths to clear the house and prepare for sale seems a very long time. In any case this could alll have been done whilst waiting for probate. Nevertheless less your situation seems very different from that of the OP.We are going through a similar process, though we have had to pay IHT.
We used the average of 3 estate agents figures to value the property for IHT and submitted this, with all other assets and exemptions on forms IHT400 and Supplements.
HMRC referred our property valuation to the District Surveyor, who approved it. HMRC then signed off the tax due, which we paid, and obtained Probate.
This took 6 months. We spent the winter clearing the house and preparing it for market, and put it on the market in the spring, found a buyer in the summer, and hope to Complete the sale shortly.
So about 18 months from the date of death. No, as Executers we have not been 'incompetant' and don't need 'our backsides kicking'!
Assuming all goes well, we will be selling the property for around £100K more than the probate valuation, so Capital Gains Tax will be due.
We did not 'deliberately under-value' the property, we took the best figure we could, which the DS agreed with. Whether prices have risen, or we've been lucky with this buyer, or we were mistaken with our original figure I don't know, but that does not make us 'personally liable' for anything. The Estate will declare the capital gain at year end and pay what's due.
If anything, the Beneficiaries should be pleased the property is selling for more than it was valued at 18 months earlier.0 -
Ah!MichelleUK wrote: »Quick question - do you mean that you will put the capital gain through as though it is a gain of the estate rather than the beneficiaries?
The reason that I ask is that if the residue of the estate has been ascertained, HMRC consider that the period of administration has ended and the beneficial ownership of the house lies with the beneficiaries. This effectively means that each residual beneficiary declares their gain and can use their own CGT allowance and rate.
HMRC's definition of the when an administration ends is quite different to what a layman would think! See helpsheet 282 for more information.
If there is any doubt, a simple 'deed of appropriation' can be drawn up where the executors basically pass the beneficial ownership to the beneficiaries and then sell the house as bare trustees. Then each beneficiary can use their CGT allowance for their share of the gain.
Yes, I meant " put the capital gain through as though it is a gain of the estate rather than the beneficiaries"
In light of what you say I shall look at passing "the beneficial ownership to the beneficiaries and then sell the house as bare trustees."
Cheers!
The fact that the Executers = the Beneficiaries has made things easier.0 -
I strongly advise you to get paid for professional advice on exactly how to do this. You can easily come unstuck trying to DIY it.Ah!
Yes, I meant " put the capital gain through as though it is a gain of the estate rather than the beneficiaries"
In light of what you say I shall look at passing "the beneficial ownership to the beneficiaries and then sell the house as bare trustees."
Cheers!
The fact that the Executers = the Beneficiaries has made things easier.0
This discussion has been closed.
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