tax on sale of inherited property

storja

Hi, my mum has recently passed away leaving my brother and I the executors of her will. A couple of months ago she gave us both £11000 each and put her account into joint names with myself. There is £27000 in that account which i will share with my brother.
Do we need to declare any of this?
Also she left a house worth £70000 and my brother has offered to buy me out, will i have to pay tax. I'm guessing the answer is yes but hoping its no
Thanks

g6jns_2

storja wrote: »

Hi, my mum has recently passed away leaving my brother and I the executors of her will. A couple of months ago she gave us both £11000 each and put her account into joint names with myself. There is £27000 in that account which i will share with my brother.
Do we need to declare any of this?
Also she left a house worth £70000 and my brother has offered to buy me out, will i have to pay tax. I'm guessing the answer is yes but hoping its no
Thanks

You have to declare the values on the probate forms as the gifts were made within seven years of the death. Unless this makes the estate exceed £325000 then it Wil not affect the inheritance taxposition. If your brother buys you out at the probate value of your share of probate value there will be no capital gains tax to pay.

storja

Thanks for the reply but can you just explain your last sentence, sorry

theoretica

I think s/he made a typo for capital gains tax. If you inherit something and declare one value on the probate form, but then later sell it for more (even years later) there can be tax to pay on the profit. But if your brother buys you out at the same value you put on the probate form you haven't made any profit so this tax is not due.

g6jns_2

theoretica wrote: »

I think s/he made a typo for capital gains tax. If you inherit something and declare one value on the probate form, but then later sell it for more (even years later) there can be tax to pay on the profit. But if your brother buys you out at the same value you put on the probate form you haven't made any profit so this tax is not due.

Apologies for the typo. It is of course CGT. Thanks for correcting me.

nom_de_plume

storja wrote: »

Also she left a house worth £70000 and my brother has offered to buy me out, will i have to pay tax. I'm guessing the answer is yes but hoping its no

I'm guessing the OP is thinking more along the lines of income tax rather than CGT.

The answer to that in very simple terms is no. Income tax is not payable on your inheritance. Capital Gains Tax is unlikely to be an issue unless your brother takes a long time to buy you out and the property value increases in the intervening period.