Capital Gains Tax

fifi36

Hi:j

I have been left a third of a third share in my granmother's house. The house has now been sold and I stand to get £13,000. Will I have to pay capital gains tax on this?

Your advice would be much appreciated.

fifi

ceeforcat

I would presume that your grandmother died recently and,therefore, it is unlikely that the value of the house would have INCREASED in value by £31800 (you each have a tax free exemption of £10600) since her death. (You can also add to this the costs of sale). If that is correct, the money is yours to keep without fear of any taxes.

Any

If it has been sold immediately after being inherited (ie it has not been used to be let out or anything in between), then it is just the inheritance tax that you would be affected by.

However this should have been dealt with by the person dealing with the inheritance and they should make sure any inheritance tax is paid before assets are distributed.

fifi36

Thank you very much for your reply.
My gran passed away in February. However, it wasn't her who left me the share. Her house was passed onto three of her adult children.
Sadly, one of these children (my aunt) died shortly before my gran. It was my aunt who left me a third of her share.
The house was a council house and apparently bought for £15,000 as my gran got a huge discount for having lived in it for over 40 years.
The house has been sold for £122,000, so that's a lot of profit. My share minus the solicitor fees should be about £13,000.
Do you think the money will still be mine to keep?
fifi

cte1111

Your capital gain is calculated as the value of the property when you inherit it, less then value when you sell it. It is unlikely that 1/9 of the gain over a few months is going to be much at all.

ceeforcat

Simply - if the house was valued at more than £90200 at the time of her death, the money is yours to keep. You have no concerns whatsoever.

Enjoy!

(I believe that it's the other way around cte1111 - but we know what you mean!)

Any

Capital Gains tax is only payable on something you bought/created (build a house)/invested in/inherited and kept and then it increased in value massively and you sold it at a massive profit.

The profit is the value difference between when you acquired (in which ever way) the item and when you sold the item (generally, it can be more complicated but yours is not the case).

As Ceeforcat says, there is no/little rise in value since YOU got the house and when it was sold.

You have still inherited, makes no difference that aunt inherited but as she has died it was passed further down onto you.

Any

Oh and just to add to my previous post about CGT - a house where you lived and was your main principal residence would be exempted from capital gains tax.

(the is no CGT to pay if you buy a house, live in it and then sell it at profit, you build a house, live in it and there is a profit or you inherit a house, live in it and sell it at more money then it was worth at inheriting. Your main residence is simply excluded from this rule. It changes if you let it out on commercial basis at any point, but not if you just live in it.)

fifi36

Thank you everyone for your extremely helpful replies.