inheritance tax help

amazamum

Hi I have a friend who inherited a property from a family member 10 years ago,he has rented the property out for 10 years has never lived in it himself.
My question is since it was purchased origionally in 1988 for about 40000 and is now worth approx 230000 how much inheritance tax would he have to pay if he was to sell it.
Thanks for any help

System

amazamum wrote: »

Hi I have a friend who inherited a property from a family member 10 years ago,he has rented the property out for 10 years has never lived in it himself.
My question is since it was purchased origionally in 1988 for about 40000 and is now worth approx 230000 how much inheritance tax would he have to pay if he was to sell it.
Thanks for any help

He wouldn't be liable for any inheritance tax as that should have been taken care of by the executor for the family member.

He might be liable for Capital Gains tax and that depends on the value of the property at the date he inherited it compared with it's value when it is sold.

Murdina

Hope he has been declaring the rental income to HMRC - they will certainly be in touch otherwise once the sale goes through (as they are notified via the stamp duty office). Ditto should he think of not declaring the gain.

The property would of course form part of his estate for inheritance tax were he unfortunately to die while still owning it.

Your friend might do well to take some paid for professional advice if it looks like the gain is substantial.