Another CGT question

chrisyd

I will be seeking from professional advice, but I would like to ask this question to gain some early information.

My father died in Feb 2012 and I have inherited the house (deeds are now in my name). The house is worth around £140k in it's current state.

My current plan is to renovate the house which will cost around £50k and rent it out.

The OH is suggesting I investigate selling the property and either buy a property near us to rent out or use the money in the future to purchase a new house (and maybe rent out our current house).

With my limited knowledge, if I sell my late fathers property I will have to pay CGT of 40% (I am a higher rate tax payer) and so have to pay 40% of £140k which is a substantial amount of money.

Any early advice would be most appreciated.

thanks

jimmo

You inherited the house in Feb 2012 at its open market value on the day you inherited.
If you sell it now your capital gain will be the difference between the Feb 2012 value and the net proceeds of sale. If there is a capital gain the first £10,900 will be exempt and, for a higher rate taxpayer, any gain over the £10,900 will be charged at 28%.
http://www.hmrc.gov.uk/rates/cgt.htm#2