CGT on Inherited House

MajorTom_2

Hi Guys,

My Nan is currently in the process of rewriting her will to leave me her house as I am her only surviving Grandchild and my father is no longer alive.

The house is worth in the region of £200k and I've been doing some reading about CGT if I sell the property after she passes away (sorry if this sounds morbid but we are planning ahead).

I see there is a tax allowance of £10,600 and then taxed at either 18% or 28%. I am a higher tax payer so I will be hit with the full 28% (thanks Mr Cameron!).
What I can't find any exact clarity on if the house is in my name and my fiance's name whether we get a total allowance of £21,200 between us? (assuming the house is in 50/50 name split). I understand if I sign 50% over to my other half after I receive the inheritance then I'm still liable.

What I'm trying to get to is whether to ask my Nan to leave half the house to me and the other half to my fiance to minimise the tax?

All help gratefully received!

Cheers,

MT

cte1111

There would only be CGT if you keep the house for a while after inheriting, then it would be on the difference between the value when you inherited it and the value when you sold it.

Does your Nan have any other assets? If her total estate is likely to be under £325,000, then there will be no Inheritance Tax to pay either.

nomunnofun

MajorTom wrote: »

Hi Guys,


What I'm trying to get to is whether to ask my Nan to leave half the house to me and the other half to my fiance to minimise the tax?



Cheers,

MT

With all the best will in the world, I would not recommend this. I am sure that you will be getting married and not doing so is furthermost from your mind but, if something does go wrong, it will cost you a lot more than an engagement ring. There is no necessity and no tax saving if you are intending to sell soon. Good luck to you both!

talkinpeace

Surely you would move into it for a year, do it up, making it your main home and THEN sell it ;-}

cte1111

Just to be clear, if you inherit a house, then there is no CGT to pay. There may be IHT to pay out of the estate, but CGT is irrelevant. There is no need to move into it, it does not apply.

talkinpeace

but there would be CGT to pay if it rose in value between the date of inheriting it and selling it if it were never a main residence

CLAPTON

talkinpeace wrote: »

but there would be CGT to pay if it rose in value between the date of inheriting it and selling it if it were never a main residence

yes indeed

if you were lucky enough to make such a gain then a small amount of tax would be payable

nomunnofun

talkinpeace wrote: »

but there would be CGT to pay if it rose in value between the date of inheriting it and selling it if it were never a main residence

More than £10600 after deducting the full costs of sale?

MajorTom_2

Thats a great relief thank you guys. The total estate is well under £325k, its mainly the house and possibly a couple of thousand in cash (none at the moment as my father cleared her out before he died).

Regards all,

MT