CGT on inherited property split between siblings

Teak

Will probably go to an accountant, but any initially guidance would be helpful. Father died in 1996 and via his will left his half of the house equally to 4 children (grown up). Mother died last month and did the same. So now the 4 children all have an equal share in the property. The executors (eldest son and his wife) are meant to sell the property and split the proceeds equally. Only 1 of the children actually ever lived at the property for some years. All 4 children now have their own properties, although one maybe living in a council flat. The property isn't in great condition so does need work to it. Some will have to be done by the family before they can sell it, although they know they'll not get full market price (neighbour's went for £173k) in its current condition.

A few questions:

For CGT purposes, the 2 inherited halfs will be be treated as seperate calculations? CGT only occurs if the difference between market value at death and when sold is greater than CGT allowance (£8,800?)? So likely to get CGT on father's half considering the value increase since 1996. But no CGT on mother's half, as long as property value doesn't increase more than £8,800 by the time it's sold?

There are certain deductables that can help reduce any CGT, like selling costs, refurb costs, etc? Are they deductable on overall CGT from both halves or just from one of the halves? Also can you include deductables made between 1996 (when father died) and when the property is sold? For example new windows 5yrs ago.

How does having 4 siblings inheriting an equal share of a property, affect the capital gains tax when it is sold? Is CGT taken as a whole, or is each sibling's share considered seperate? So each sibling could have their own CGT allowance to use against the father's half? Just I read somewhere the executor's are able to use the deceased's CGT allowance or use their own. Can the executor's put it in their joint-names and use both their CGT allowances (£17,600?)? Could all 4 siblings do something similar?

Also who values the property for CGT purposes? Do we get it valued or the Inland Revenue? Any places that could help find the 1996 value? If anything in 1996 it was in better condition than it is today.

Does the child that previously lived at the property for some years, able to use that fact in any way for CGT? Even though they live in their own property now.

If any of the siblings are on benefits or low-income, does that have any affect?

silvercar

How does having 4 siblings inheriting an equal share of a property, affect the capital gains tax when it is sold?

Each child accounts for their own CGT on their own tax return.

Is CGT taken as a whole, or is each sibling's share considered seperate?

Each share is seperate.

So each sibling could have their own CGT allowance to use against the father's half?

Each sibling will have their own allowance to use against their gain.

Just I read somewhere the executor's are able to used the deceased's CGT allowance,

The executor gives the proceeds of each persons share to that person. They then account for it in their own tax return. In tying up the estate the executor will account to the revenue for the tax on the estate, but you said that inheritence tax is not relevant here.

or can change it so if they put it in their joint-names they can use both use their CGT allowances (£17,600?)?

If any of the siblings are married or in civil partnership they can transfer half of their inheritance to their spouse prior to sale.

The two questions I can't answer are whether you could claim that the inheritance was meaningless until now, as you couldn't evict the mother to gain access to your half and therefore the value as of now should be considered rather than half of it dating back to 1996.
I also don't know whether you can have a principal private residence as the home you lived in as a child to reduce your CGT bill. I would guess not, as you didn't own the home yourself.

RabbitMad

I think you should check how the house was owned. If it was joint tenants rather than tenants in common your father was unable to leave his share of the house to you (as your mother automatically became the sole owner on his death) therefore removing any CGT liability on increase invalue since 1996.

Teak

Thanks, will look into it.

benood

If they were joint tenants then the solicitor who made up your father's will would have to have been pretty incompetent!

I think it's unlikely you could claim the original inheritance was meaningless indeed that might be counterproductive as having your mother as a sitting tenant would decrease the value of the property in 1996 resulting in a greater gain now.

You should get deductibles since 1996 and indexation upto 1998 when the chancellor abolished it as we no longer have inflation.

The valuation is done by the district valuer if referred to him, initially you do it when you submit your tax computation - try to support a high valuation in 1996 - what was used in the will, but a probate valuation is different from a CGT valuation so there is some wriggle room - i'd argue over the last few years very little has been spent on the place, but your father used to keep it in tip top condition...

Good luck