IHT / CGT query

andrewm1981

Hi,

I have a question which I hope someone can help me with.

My father passed away around 9 months ago. I am the sole beneficiary When I originally filled in the forms, I thought the flat was worth around £250k, with cash and afew other bits worth around £20k, and this is what I put on the form. Fine, case closed.

I'm in the process of selling the flat (exchanging tomorrow) and it sold for £321k (price was agreed in August, it was probably worth around £300k in February when my father passed) and so with the other bits it takes me over the £325k limit. I have spent around £5k on funeral, £7k on selling the flat, so in honest it probably totals around £330k that I have benefitted.

My concern is, is that I will have to pay CGT on the increase in value from £250k to £325k? Or do I need to fill in a new form (I forget the name) declaring the adjusted values and pay IHT on the £5k?

Thanks in advance

Andrew

Savvy_Sue

There is a form for reporting changes. I suggest you phone the probate registry and ask for advice. Do your sums carefully, make sure you have claimed all valid expense.

Also is your mum still alive, and if not were they married at the time of the first death? Anything left to a spouse passes free of IHT, and then you can benefit on the second death from any unused allowance from the first death.

It's late, I may not be explaining things that well ...

xylophone

Transfer of spouse nil rate band?
http://www.clickdocs.co.uk/inheritance-tax.htm

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/373532/IHT402.pdf

andrewm1981

Hi,

Thanks for your replies.

Him and my mum had divorced, so there is nothing to be transferred there.

I called the probate helpline and the CGT helpline. They advised filling in a CA4 form for changes to the original 205 form, and I have a letter from the estate agent declaring the value of the flat in February. Ill send that off and then there should be no IHT to pay (total is £325k after funeral expenses) and no CGT as gain would be £10k which is within personal limit.

Hope that works!!

Andrew