Capital Gains tax between passing and occupying a property

PaulH295

My father passed away in February 2021. Probate was completed in July 2021. I am now registering the property in my name. I do not own another property and will move from my rented property, where I have been for the last few years.. If I sell my father's house in the future, does capital gains have to be paid on the period Feb 21 - Jan 22, when the property was not occupied? I will be there from now till the sale point. I can't see references to such a period of absence waiting for probate and registration of the property. I have been clearing it out over the last six months. Thank you for comments and any references to relevant HMRC rules.

p00hsticks

PaulH295 said:

My father passed away in February 2021. Probate was completed in July 2021. I am now registering the property in my name. I do not own another property and will move from my rented property, where I have been for the last few years.. If I sell my father's house in the future, does capital gains have to be paid on the period Feb 21 - Jan 22, when the property was not occupied? I will be there from now till the sale point. I can't see references to such a period of absence waiting for probate and registration of the property. I have been clearing it out over the last six months. Thank you for comments and any references to relevant HMRC rules.

Under the current rules, potentially yes, when you come to sell it. But if you intend to live in it for a reasonable period of time and the property doesn;t soar in value over that time, then it's unilkely that there would be any tax due.

It's something you don't need to worry about until you come to sell it, and probably not even then.

Brie

Wouldn't the property be deemed to be owned by the OP between date of death and registering in the new name due to the terms of the will (or lack of will)??   And if not it would be owned by the estate (so no CGT to be paid) until it's not and then any CGT will be due based on whether the OP is using it as their residence or not.  (so again no CGT)

Or am I missing something obvious?? (very likely)

Jeremy535897

I am assuming that the property was left to OP in the will, and he is deemed to own it from father's date of death and acquire it at its market value at that date. As the property was not occupied by OP as their main residence up to January 2022, at first sight that part of the gain is not exempt. HS 283 points out that non-occupation of a property as a main residence does not necessarily prevent that period qualifying for main residence relief:

"If, for up to a period of 24 months you do not occupy your new home when you acquire it because you’re unable to sell your old home, or you need to carry out refurbishment redecoration or alterations, you can treat up to the first 24 months as if the house had been your only or main residence in that period. The same treatment applies when you buy land to build a house on.

Example 6

You bought a house in January 1998, but it needed major refurbishment and you could not move in until January 1999. If it was subsequently your only or main residence until you sold it in June 2020, you are entitled to full relief."

From https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2021#who-qualifies-for-relief

The law is set out in section 223ZA TCGA 1992, which sets out the conditions for relief more comprehensively than the brief description in HS 283:

https://www.legislation.gov.uk/ukpga/1992/12/section/223ZA

PaulH295

Thank you very much. There were indeed refurbishment and throwing away of junk: ongoing! The references are much appreciated.