Value of inherited property for CGT calculation?

AllThatGlisters_2

Hi All,

I am beginning to get my head around all the reliefs I can claim from CGT when I sell my parent's former home.

One question on how to define the gain - I will know how much it is sold for but how to decide the value of the property at the time of inheritance?

I remember giving a value when my Father died for inheritance tax purposes but it was very much a guess, at the time I didn't know so much about local property values. Can anyone tell me if there is a more accurate method of estimating the value of the property as it was in January 1997??

Many thanks in anticipation..

Debt_Free_Chick

Wait around for confirmation, but I'm fairly sure that it will be the value shown in your father's estate i.e. the "guess" that you made in 1997.

If you think about it .... if you try and up that value to reduce your CGT, then strictly speaking, your father's estate should be reassessed for IHT based on that higher value. .... swings & roundabouts!

I doubt you would have got away with a wild guess anyway. As I understand it, the part of HMRC that deals with estates generally casts an eye over property values - either that, or you would have produced some evidence to support the claim.

Safest bet is simply to leave things as they are .... but wait for others to confirm or comment.

Petmidget

This will come down to a couple of points.

If your father's estate was of sufficient size to merit a IHT return then the house will have been valued, if that value was guestimated and HMRC did not query it, you can assume that they accepted it. Which makes it your base cost in your CGT transaction.

If the estate did not merit a IHT return then you will self assess you CGT liability, HMRC will likely open an aspect enquiry as I take it you dont sell property every year and ask for a copy of the calculation.

You can pretty much put in anything you want for the base cost, but you have to be able to justify it, and if HMRC dont like it they will refer to the District Valuer who will research the value.