Inheritance tax

polle

Hi,
When my father died a number of years ago, the 2 properties own by my parents went into tenants in common with my mum owning 50% and my sister and I owning 25% percent each. Now we are selling one of these properties, will any of use be subject to any taxes? 

p00hsticks

Who has been living in the property ?

Anyone who hasn't been living in the property as their main residence for the whole time they owned it is potentially liable for Capital Gains Tax on any profit made on the sale. You each have an annual CGT Allowance of £12,300.

xylophone

Are you/your mother/your sister living in the property that is now being sold?
 

polle

Hi, thanks for taking the time to respond. Mum has been living in the property as main residence, she also has another property which she also uses, this 2nd property is also 50 / 25 25% ownership. Sister and I have our own property.

xylophone

Your mother lives in the property which has always been her main residence but since your father died, you and your sister have been tenants in common with her on a 50/25/25 basis?

This is the property to be sold?


Your mother is selling her Principal Private Residence so there is no CGT on her share of the sale proceeds.

You and your sister  could be due to pay CGT on your individual shares of the sale proceeds to the extent that  the  gain since you inherited the property is greater than your CGT allowance.

https://www.gov.uk/tax-sell-property

polle

Yes that is correct, so am I right in thinking that whatever the house was valued at for probate versus the sale price, that difference of which 25% each for me and my sister would be subject to capital gains tax?
Again many thanks for helping on this

xylophone

Try this calculator
https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/

xylophone

https://forums.moneysavingexpert.com/discussion/6191623/cgt-on-inherited-property#latest
may be of interest.

getmore4less

Was it an absolute inheritance with no life interest for the spouse?