Do I need to pay capital gains tax?

jonnyfive1

Hi, I'd appreciate a bit of advice if possible. Earlier this year I inherited a house which I have just placed on the market to sell. I currently do not own my own property and rent. I have never lived in the house I am selling so dont fit under the primary residency relief. Does this mean I will have to pay CGT even though it will essentially be my only owned property at the time when its sold, or would this fall under the 3 year exempt rule? Many thanks.

chrismac1

You will have been deemed to inherit this property at the market value. So unless it has shot up in value by over 10,100 - well done if it has! - there will be no tax to pay. But it will be a disclosable disposal you should put on your tax return. In fact you might well have a loss on sale to carry forward. Suppose you sell for 200,000 there are fees to pay of 4,000 and the MV on inheritance was 198,000

Gross Proceeds - Fees on sale - Deemed Cost = 200,000 - 4,000 - 198,000 = 2,000 LOSS

This loss is carried forward indefinitely against any future CGT profits from property, shares, certain types of car, etc, etc.