CGT on inherited property

Dobeylove

As part of a Court Agreement If an inherited property is sold 3 years later for less than it was valued at Probate, would the person who inherited it pay CGT on the uplift in value since Probate? Although it is a gain in value, it's money that hasn't been received.
Also would the Estate be able to claim back IHT if the property were sold for less?

[Deleted User]

No. However if it is sold to a ‘connected person’ at less than market value the sale proceeds would be deemed to be that market value.

A very simplistic answer which will be no doubt elaborated upon by those more expert than I.

Keep_pedalling

Dobeylove wrote: »

As part of a Court Agreement If an inherited property is sold 3 years later for less than it was valued at Probate, would the person who inherited it pay CGT on the uplift in value since Probate? Although it is a gain in value, it's money that hasn't been received.
Also would the Estate be able to claim back IHT if the property were sold for less?

I presume you meant to say is sold for more the probate value, in which case CGT will be payable if the gain exceeds the beneficiaries annual allowance, unless the beneficiary had been using the house as their primary residence in which case it would be exempt.

[Deleted User]

Keep_pedalling wrote: »

I presume you meant to say is sold for more the probate value, in which case CGT will be payable if the gain exceeds the beneficiaries annual allowance, unless the beneficiary had been using the house as their primary residence in which case it would be exempt.

Clearly you are less cynical than I. I just detected an attempt to avoid CGT by selling at undervalue.

Keep_pedalling

[Deleted User] wrote:

Clearly you are less cynical than I. I just detected an attempt to avoid CGT by selling at undervalue.

No I just read it differently, but you reading is the correct one

Dobeylove

Thanks for your reply.
The property was sold for less than the Probate value as part of a Proprietary Estoppel claim.

Dobeylove

Theres no avoidance of paying CGT. This was part of a settlement for Proprietary Estoppel whereby I gave money to the executors/beneficiaries of my mothers Estate who agreed to transfer the ownership of her property to me. This exchange of money was less than the market/probate value. Would the Executors/beneficiaries be liable for CGT?

xylophone

Is the case that you were not actually left the property in your mother's will?

Or you were left only a part interest?

Or there was an intestacy and you were only entitled to a share of the value?

Despite the above, at some stage you were promised the property and relied on the promise?

https://www.forsters.co.uk/news/blog/proprietary-estoppel-claims-lessons-recent-case-law

The court has ordered that the property must be transferred to you but that you must make a payment for it?

The payment is below market value and below probate value?

It is up to the executor/administrator to establish the tax position?