capital gains tax can i work it out

tyllwyd

lucadobe wrote: »

i was told that as this property was not our own home when we sold it we would be liable to CGT

That's right - but you are only paying tax on the increase in value during the time when you owned it. Since it has actually gone down in value (on paper at least) since you inherited it, there is no increase in value to pay tax on.

macman

The actual inheritance itself is free of tax.

lucadobe

tyllwyd wrote: »

That's right - but you are only paying tax on the increase in value during the time when you owned it. Since it has actually gone down in value (on paper at least) since you inherited it, there is no increase in value to pay tax on.

it's not as much that in 8 wks since it was valued it has gone down in value but realistically the updating which would have to be made by the buyer that you accept a lower figure....

lucadobe

macman wrote: »

The actual inheritance itself is free of tax.

IHT is not the issue here because its below the £325,000 IHT threshold

macman

lucadobe wrote: »

IHT is not the issue here because its below the £325,000 IHT threshold

How do you know what the total value of the estate was? It may have been above the threshold. The point I was making is that since any IHT (if applicable) has already been paid, no further tax is due until resale of the asset, and only then if there has been a capital gain-which in this case, there has not.
The OP seemed to be under the impression that the inheritance itself was taxable.

lucadobe

macman wrote: »

How do you know what the total value of the estate was? It may have been above the threshold. The point I was making is that since any IHT (if applicable) has already been paid, no further tax is due until resale of the asset, and only then if there has been a capital gain-which in this case, there has not.
The OP seemed to be under the impression that the inheritance itself was taxable.

what do you mean how do i know how much the estate was worth?? the property was valued by a CS for the figure of £300,000...and there was savings ( cash) in bank £15,000..total £315,000..IHT threshold is £325,000

macman

Sorry I misread your earlier post, I didn't realise that the total estate was under the IHT threshold, as you referred to 'property and savings', I thought there might have been other assets. However the point remains that the inheritance is not taxable upon sale, even if it's value exceeds 325K. It's only the gain that can attract CGT.

lucadobe

macman wrote: »

Sorry I misread your earlier post, I didn't realise that the total estate was under the IHT threshold, as you referred to 'property and savings', I thought there might have been other assets. However the point remains that the inheritance is not taxable upon sale, even if it's value exceeds 325K. It's only the gain that can attract CGT.

so going back to my original query regarding CGT i will not have to pay CGT when i sell the property for £270,000 despite being told different from a supposedly knowledgeable person...lol!!

00ec25

lucadobe wrote: »

so going back to my original query regarding CGT i will not have to pay CGT when i sell the property for £270,000 despite being told different from a supposedly knowledgeable person...lol!!

correct
you inherited the property at a "cost" of £300 and are selling for £270
CGT liability is a capital loss of £30 which you can use against other capital gains, if you have them, or carry it forward to future tax years and offset it (use it up) as future gains arise
BTW given the sums involved you are required to inform HMRC of this transaction and so you can register your loss with them

Mikeyorks

00ec25 wrote: »

BTW given the sums involved you are required to inform HMRC of this transaction and so you can register your loss with them

Only the case - surely - if the OP is currently required to make SA Returns?

There's no requirement to notify HMRC otherwise, where there is no liability. Registering any loss can be done outside SA Returns ..... and there's no real time imperative.