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Capital gains tax
Misterboy
Posts: 22 Forumite
I am in the the process of inheriting a property from my late mum with my sister. We know that there will be no inheritance tax to pay because it's below the threshold. But if we sell straight away will we be liable to pay Cgt? Thanks.
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What gain will you make between the date of 'acquisition' and the date of selling?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Well it's been valued for probate and we will probably sell at that price.0
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CGT liability will be nil then."Real knowledge is to know the extent of one's ignorance" - Confucius0
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Even though we are gaining all proceeds of the sale?0
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The base cost of the CGT calculation is it's probate value. CGT is calculation on the "gain", not sales proceeds.. That's why it's called capital gains tax."Real knowledge is to know the extent of one's ignorance" - Confucius0
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Ok, thanks for that. Very helpful. I've been struggling to get my head round it. Couldn't understand Gov.uk website.0
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additionally note that if the Estate pays CG, the rate is 28%.
If you and sister pay the CGT, you will each pay at the rate relevant to you individually, which may be 20% or 28%.
You would not need to transfer the Title into joint names before selling - a Deed of Appropriation could be created with the Exrcuter(s) then selling as Trustees for the Beneficiaries, rather than as Executers of the Estate.
I'm not sure, but I believe the other option (assuming the property sells for more than the Probate value) would be to inform HMRC and get the Probate value adjusted up to the sale price. If still below the Inheritance Tax threshold this might avoid all tax. If it takes you over the Inheritance Tax thresholdyou'd then be liable for Inheritance Tax (at 40%).0 -
Ok guys, thanks for all this info. Very much appreciated. Something else has just been brought to my attention... if my mum has left a will with both of us named as executors and beneficiaries do we still need probate?0
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Yes.
You cannot sell or transfer ownership of a property without Probate, which proves you have the right to sell/transfer a deceased person's property .0 -
Ok thanks. And thanks all for your help.0
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