capital gains tax

triumph41

I have inherited my mothers house, it has been rented out for the past two and a half years. Its value is about £80000. It has no mortgage on the property. My question is, if I sell the property will I have to pay Capital Gains Tax on the proceeds I currently pay tax at 20%.

Are there ways to avoid or reduce the amount of tax I would need to pay.

Thanks

Tony

p00hsticks

It will depend on what the probate valuation was compared with the market price when you come to sell - you will be potentially liable for CTG on the difference

zygurat789

triumph41 wrote: »

I have inherited my mothers house, it has been rented out for the past two and a half years. Its value is about £80000. It has no mortgage on the property. My question is, if I sell the property will I have to pay Capital Gains Tax on the proceeds I currently pay tax at 20%.

Are there ways to avoid or reduce the amount of tax I would need to pay.

Thanks

Tony

You don't pay CGT on proceeds only on the gain (as the name would suggest) The gain is the sale price less any associated expenses (estate agnt etc) LESS your cost price. Your cost price will have been arrived at in the calculation of your mother's estate. From any resulting gain you may deduct an annual exemption of £10,900 (£11,000 from 6/4/13) and anything left is taxable.
If there should be any CGT tp pay then if you have a spouse, consider joint ownership which will give two lots of annual exemptions or £21,800.

triumph41

Thank you for your help