Mum passed away last week saturday....

foi1983

....and left her house to us (her 5 children).

The solicitor is currently dealing with probate. We have been discussing selling the house when probate is granted. What tax will we have to pay on the house if it is sold? I know that if we rent it we will have to pay income tax on it.

Thanks

ClootiesMum

I'm sorry to hear about your Mum

I can't help re taxes to be paid, but I'm sure someone will be along soon with good advice

orangeslimes

I don't really know very much about this either but we had death in family so were having this discussion-
threshold is £325,000 so if estate worth less than that you shouldnt have to pay inheritance tax.
And apparently inheritance tax is based on the value of the house on the date of death - so not what you sell it for (if the value of house goes up you may be liable to capital gains tax though)
The threshold might be more depending on the circumstances...i.e. when your mum's spouse died (if they existed and if they died)
If you google HMRC inheritance tax they have some information.

Essex_Maid

Sad time for you all.

I should ask your solicitor - they will advise you once they have collected all the financial information on your mother's estate.

00ec25

Old post I know but first off heart felt condolences.

Inheritance tax - are you the executor, if not why not leave it to the solicitor, they will tell you if the estate will incur IHT. Without knowing your mother's circumstances (I assume your father has also gone?) then the house is typically the largest component of the estate's value. As part of probate the solicitor will get it valued at the date of your mother's death and tell you if the total estate (house, savings, shares, cash, car, possessions etc etc) is >£325,000 and thus liable for IHT - it will be a little more complex if your father died before your mum as when that happened might alter things a bit

If you are IHT liable, the solicitor will ask you if you want to value the house at the price it actually sells for or if you want to go with a paper value only.
If you opt for the paper value only and then sell the house within 2 years of the death, you will have to tell HMRC what you actually sold the house for and you will either have to pay extra IHT (sale price > value) or get a tax refund (sale price < value), assuming of course the estate is actually liable for IHT to start with

If the estate value is <£325,000 then you can sell it tax free within 2 years. If you keep it more than 2 years, even if no IHT was due, then you will have to pay CGT when you sell it after 2 years, as technically it would then be owned by the people who inherited it and who would have to pay GCT on the gain between the value at date of inheritance (death) and the price they subseuqently sell it for (assuming it increases in value)

Hope this helps, the solicitor knows what they are up to, best left to them whilst you get on with remembering your mum

John_Pierpoint

It is most important to have all the facts and figures surrounding your father's death.
If he left everything to your mother & they were legally married, the second death benefits from double nil rate band for IHT, so first 650,000 of the total estate value would be tax free.