Capital Gains Tax?

MrPlinky

Hi there,

My father owned a property where he lived, but which was also used as a business. The residence had four self contained holiday flats that were let out to people on holiday.

He died a year ago, but the business has been wound up for a few years before that.

The house is now being sold (circa £175,000), and was initially bought for around £30,000.

Is any capital gains tax due? I am unsure, as the business has ended, and that he lived in part of the property.

Any ideas?

Thanks

antrobus

MrPlinky wrote: »

Hi there,

My father owned a property where he lived, but which was also used as a business. The residence had four self contained holiday flats that were let out to people on holiday.

He died a year ago, but the business has been wound up for a few years before that.

The house is now being sold (circa £175,000), and was initially bought for around £30,000.

Is any capital gains tax due? I am unsure, as the business has ended, and that he lived in part of the property.

Any ideas?

Thanks

The property is now part of your father's estate. The estate will only be liable for CGT on any gain made by reference to the value of the property entered on the Inheritance Tax return.

MrPlinky

antrobus wrote: »

The property is now part of your father's estate. The estate will only be liable for CGT on any gain made by reference to the value of the property entered on the Inheritance Tax return.

Hi, thanks for answering but I'm a bit unsure what you mean? The house is the only thing in the estate, so there should not be any Inheritance Tax due?

zygurat789

antrobus wrote: »

The property is now part of your father's estate. The estate will only be liable for CGT on any gain made by reference to the value of the property entered on the Inheritance Tax return.

The property is valued as part of the estate. Inheritance tax may be payable on the estate.
Cgt on the property, when sold, will be calculated from the valuation in the estate..

MrPlinky

zygurat789 wrote: »

The property is valued as part of the estate. Inheritance tax may be payable on the estate.
Cgt on the property, when sold, will be calculated from the valuation in the estate..

Ok, thanks.

In this instance, there is no Inheritance tax due to the amount involved (£175,000) split 2 ways, between myself and my sister.

What I am interested in is whether any Capital Gains tax is payable at all since the business has been wound up for a number of years. Not to mention that my father lived in significant proportion of the property (approximately 1/3 of it) till he went into a nursing home, so only 2/3 was ever used as part of a business

Thanks!

zygurat789

MrPlinky wrote: »

Ok, thanks.

In this instance, there is no Inheritance tax due to the amount involved (£175,000) split 2 ways, between myself and my sister.

What I am interested in is whether any Capital Gains tax is payable at all since the business has been wound up for a number of years. Not to mention that my father lived in significant proportion of the property (approximately 1/3 of it) till he went into a nursing home, so only 2/3 was ever used as part of a business

Thanks!

The "business" may not have owned the premises, even if it operated as an Ltd the property would probably have been owned by your father.
HMRC (or maybe the Inland Revenue) would have been after all taxes due when the business ceased.

John_Pierpoint

Presumable this holiday let venture was in the UK?.
Inheritance tax cancels out liability for Capital Gains Taxm so be it even if the IHT in the zero % band..
You have paid the £3 to double check on-line with the Land Registry to see who appears to own the property and it is dad?
Fill in the IHT (not payable) forms and the legal forms, swear the will & supporting documents, get probate, transfer or sell the property, job done.

Perhaps I should have added settle final income tax (repayment?) situation and keep accurate accounts.

Much advice here, I personally used the "Which?" guides.
http://www.amazon.co.uk/What-Do-When-Someone-Dies/dp/1844901270#reader_1844901270