CGT on shared property after inheritance

bluejag

My mother recently passed away and has left all of her estate to my father. This estate include 2 B2L properties one that she full owned and one where the ownership was shared between my mother and father. I do understand  that for the fully owned property that CGT is deemed paid and therefore if my father then sells the property he would only have to pay the CGT incurred for the difference in value between the sale price and the price on inheritance. But what about the shared property Does my father have to pay all the CGT for the full value between the sell price and the original purchase price minus expenses or does the fact that my mother owned 50%  reduce the CGT exposure by say 50% with regard to the original purchase value and the value at inheritance?

Jeremy535897

Your father's base cost of the jointly owned property will now be the value of your mother's share at the date of her death (which may be a little less than half of the whole), plus what he paid for his share (acquisition cost, expenses of acquisition, enhancements he paid for that are reflected in its value).

bluejag

So assuming they jointly bought a house for 100K at the time of my mothers death it was worth 300k and when my dad sells it it was worth 400k (ignoring any acquisition costs enhancements etc) would my dads CGT exposure on CGT be
(400,000 - 100, 000)/2 + (400,000-300,000)/2 = 150,000 +50,000 = 200,000,
or are you saying it just 400,000-300,000 = 100,000

Jeremy535897

£200,000 on those figures, but it might be more than that as a 50% interest in a house is not equal to half the whole value.

Keep_pedalling

Jeremy535897 said:

£200,000 on those figures, but it might be more than that as a 50% interest in a house is not equal to half the whole value.

I know that is the case for IHT, but surely CGT is based solely on the actual market price achieved in the sake. Also at the time of sale there will only be a single owner.

Jeremy535897

Keep_pedalling said:

Jeremy535897 said:

£200,000 on those figures, but it might be more than that as a 50% interest in a house is not equal to half the whole value.

I know that is the case for IHT, but surely CGT is based solely on the actual market price achieved in the sake. Also at the time of sale there will only be a single owner.

I am talking about the market value at the date of mother's death, not the sale by father. On her death, mother owned 50% of a house, with the other 50% being held by the other occupant. The only purchaser who would pay full price for mother's half in those circumstances is father. Any other purchaser would expect a discount, although they would also be aware of the existence of a "special purchaser" (father). That is why discounts tend to be in the region of only 5% to 15%. The case of Newman v Hatt in 2001 used a 10% discount, which was accepted.