What are my CGT options after an inheritance??

Mark300zx

Hi,

I am sorry to say a short while ago my Mother passed and left me her house in her will!

I am aware that depending on what option I take in the future, has different outcomes for my CGT liability and I would like to minimise this.

Option A
I own my own flat and realise I could sell this and have no cgt to pay, if I move into my Mother's house with a view to renovating it, then would I have any cgt to pay if I live in it more than three years?

Option B

I sell my Mother's house straight away and I presume there is no CGT to pay as it is a straight forward inheritance?

Option C

I move out of my flat and rent it out, using the revenue from this to help the refurbishment of my Mother's house. I presume I would then have to pay CGT on my own flat if I sell it in the future and none of my Mother's house if I sell after living in it for 3 years?

Thanks in advance for any replies

BoGoF

First of all, sorry for your loss.

Your starting point for any of the options is that your 'acquisition cost' of your mum's property is the probate value. So unless it is sold for more than probate value then there will be no CGT liability (plus you have your £10,600 annual exemption)

xylophone

http://www.hmrc.gov.uk/inheritancetax/tax-when-you-inherit.htm
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4020890

In your position (and assuming it wouldn't be inconvenient for commuting etc), I think I'd sell the flat now (principal private residence so no CGT) and move into mum's house (becomes your new PPR) using the money raised from the flat to renovate the property.

You can then sell the house (PPR so no CGT) and buy whatever takes your fancy as your next PPR?

John_Pierpoint

There are some options for owning two properties at once and overlapping the PPR relief/rental allowance.
https://forums.moneysavingexpert.com/discussion/3446759
https://forums.moneysavingexpert.com/discussion/3198124