Sell now or rent. Tax liability

pjran

The property in question is valued at £130K and was gifted in a will.

I have two questions that hopefully one of you MSE's might be able to answer:

1. Would one have to pay CGT if sold now?

2. If it is let then any rental income is liable to tax and incur CGT if sold in a couple of years. So is it worth selling now?

Pj

CLAPTON

assuming you have never lived in the property as your principal residence then cgt is applied to the profit on the sale i.e. the difference between the selling price and the acquisition price less buying and selling costs
in the case of an inheritance the acqusition price will be the probate value

again for rental income you will be liable to pay income tax on the profit... i.e. the rental income less allowable expenses

laurel7172

Don't be afraid of paying tax-you pay tax when you've made money. And if you sell the house and bank/invest the cash, you'll be paying tax on that income anyway.

You need to ask yourself what return you could be making on your £130K if it weren't tied up in the house, take a guess at which way the house market will go, and decide how much risk you want to take with the income and capital. Oh, and factor in the labour and pitfalls of being a landlord. Tax is part of the equation, but it shouldn't be the overrriding factor.