CGT payable?

bubbleheads

Hello all.

I inherited a house, 1 year ago.
The value at probate was £285,000.
No inheritance tax was paid.

My best guess is a rise to roughly £300,000 given what other similar houses have fetched recently.

It has been rented out in this year, and never has been my primary residence. For the past 5 months I have lived on a boat. I have no other home I can live in.

I wish to sell the house and put it as a deposit to a house I will live in, 140 miles away.

The capital gains tax would suggest I am looking at about £50,000 to pay, is this correct?
I am a small business owner of 25 years, that has suffered badly in the downturn recently and as such have paid a small amount of income tax in 2 years. I am a lower rate taxpayer.

Thank you very much for any assistance. It seems a tad of a minefield....

CLAPTON

in simple terms of cgt the calculation would be

gain is 300,000 minus 285,000 minus selling costs (say 4,000) = 11,000


you have a cgt allowance of 10,600
so taxable gain is £400

so actual tax would probably be 400 x 18% = £72

however you could argue that the probabate value was incorrect but I'm not sure about how that would work.

skintmumofone

CLAPTON wrote: »

in simple terms of cgt the calculation would be

gain is 300,000 minus 285,000 minus selling costs (say 4,000) = 11,000


you have a cgt allowance of 10,600
so taxable gain is £400

so actual tax would probably be 400 x 18% = £72

however you could argue that the probabate value was incorrect but I'm not sure about how that would work.

This is correct as above, however, if also you have a spouse you can transfer half to your spouse before missives are concluded and you can half 2 CGT allowances. I am an Executry Paralegal in Scotland and have had to do this in estates I deal with.

Not too sure about English estates as they are probate and not Confirmation which is the Scottish equivalent,.

sunshinetours

Don't forget you have rental income to declare as well whilst you have been renting it out

harryhound

If you are within two years of the death you could try to adjust the probate valuation to match the sale price. (unlike CGT , IHT ge it at zero percent or 40%, does not recognise the costs of sale. Obviously swapping CGT at 18 or 28% for IHT at 40% makes no sense.