Register with Land Registry and Capital gains tax

chriscad

I inherited my fathers house equally with my niece, and me as executor. We did not register with land registry at the time as we were planning to sell but due to various things the house remained empty for over 10 years, so it is still under administration. If I now transfer the property to ourselves ,as tenants in common, with the land registry, will I be liable as executor for any capital gains tax as the house has increased in value , or will CGT only be payable on the eventual sale of the property. If so would I be able to use both our CGT allowances when the time comes.

G_M

The time to investigate this was 10 years ago when you could have taken action to minimise the CGT liability.

The Estate is liable for CGT on the increase in valuation between the date of death (Probate value), and the date the property is sold or transferred to the Beneficiaries. Subject to the annual allowance of £11,100.

The Estate pays CGT at 28%.

As Executer, you are responsible for payment of the CGT.

Had you transferred the property to the 2 Beneficiaries (or set up a Deed of Assent)

a) each beneficiary could have used their CGT allowance, and

b) CGT would have been levied on each at 18% or 28% depending on the individual's tax bracket.

booksurr

G_M wrote: »

The Estate is liable for CGT on the increase in valuation between the date of death (Probate value), and the date the property is sold or transferred to the Beneficiaries. Subject to the annual allowance of £11,100

the estate only has a CGT allowance if it sells assets in the year of death or in the 2 tax years after the tax year of death.

10 years later means the estate now has zero allowance, not 11,100

OP you need professional advice to unpick the situation you have put yourselves in. Hint: distribution of an estate to the beneficiaries is not a CGT taxable event

G_M

booksurr wrote: »

the estate only has a allowance if it sells assets in the year of death or in the 2 tax years after the tax year of death.

10 years later means the estate now has zero allowance, not 11,100

Thanks for the correction booksurr.

Agreed.

chriscad

I have been told that by transferring the property to the beneficiaries the transfer will be deemed to be at probate value and each beneficiary will be allowed to apply their own CGT allowance when the property is eventually sold.

booksurr

chriscad wrote: »

I have been told that by transferring the property to the beneficiaries the transfer will be deemed to be at probate value and each beneficiary will be allowed to apply their own CGT allowance when the property is eventually sold.

that is correct, distribution of the estate is not a chargeable disposal

read upon on what it means to be a bare trustee because that is what the executors are and it is under that status that they hold the assets