Selling Home I inherited, what Capital gains tax??

Simmo01

Hi there


I am considering selling a property I inherited in 2015. Will I have to pay capital gains tax? I currently rent this property and have a buy to let mortgage on it, will I have to pay any Stamp Duty or is this applicable to buying only?


Any help would be much appreciated. Thank you.

Pixie5740

Simmo01 wrote: »

Hi there


I am considering selling a property I inherited in 2015. Will I have to pay capital gains tax? I currently rent this property and have a buy to let mortgage on it, will I have to pay any Stamp Duty or is this applicable to buying only?


Any help would be much appreciated. Thank you.

You pay SDLT when you purchase a property so it is not relevant to your inherited property.

However, as the inherited property is not your main residence it will be liable for CGT but you will probably find that your CGT liability will be zero.

The thread below provides the mechanism for the CGT calculation.

http://forums.moneysavingexpert.com/showpost.php?p=69071134&postcount=6

saajan_12

Stamp duty- only upon buying and paying consideration (in cash or taking on a debt in return for the property). How much of the property did you inherit and did you buy out someone else / take over a mortgage?

CGT- First calculate your gain as the difference in current value and the value when you acquired it (probate value)

G = Sale price - Probate value - buying/selling costs

If you have never lived in the property since you inherited it, there will be no principal residence relief nor letting relief. You have an annual allowance of 11.3k less any other capital gains you have made this tax year.

CGT payable on Gain - 11,300

You pay CGT at 18% of this for the portion of Gain - 11,300 such that your other income doesn't exceed the higher rate threshold, and 28% on the rest.

We can further help with the calc if you clarify
1) Did you inherit the whole property or buy part? SDLT may be overdue..
2) Have you lived in the property at all during your ownership?
3) Have you made any other capital gains this tax year (eg selling property, investments, shares.. )
4) What is your total income this year (salary+rent+..)

00ec25

Pixie5740 wrote: »

The thread below provides the mechanism for the CGT calculation.

http://forums.moneysavingexpert.com/showpost.php?p=69071134&postcount=6

hmm
that may just confuse in this context though as OP has never lived there whilst an owner, so has no PRR and thus no LR claims

what OP does have is a gain (or loss possibly?) from inheritance valuation (*) to what he sells it for. From that gain he can claim the exempt allowance and if the balance is +ve that is his net taxable gain subject to CGT

in simple terms, has the property increased in value by more than £11,300 if you were to sell it before April 2018. If it has, you'll have some CGT to pay

* there are further technicalities associated with how it is valued ("ascertained") and what figure HMRC will accept if the deceased person's estate did not physically have to pay inheritance tax.

Keep_pedalling

What was the value of the property declared on probate and what is the value now?

Thrugelmir

How was the property valued for probate?

chanz4

the btl mortgage in your name?