Inheritance capitol gains costs?

boomish

We are unsure what to put for costs as asked on the CGT form on the GOV.uk site.

My wife has inherited some money from her mothers estate, part of the House sale was left to her some years back when her father passed now she has the remainder of the state the solicitor has advised her of her share (split amongst 3 siblings) from the gain arising of her original property share value to the recent sale value. 
We have 60 days to inform and pay the CGT but going on the site it asks the original share value & costs and the current value & costs, we are unsure what to put for costs as the original fees when her father passed would have been paid by her mother and the current sale share received is after costs. 

I hope that makes sense..

[Deleted User]

Quite confusing - I can’t work out what has been sold to generate a capital gain. It appears that she has sold a property, her share being acquired upon her father’s death? In that case the base cost for her would be the value of that share at the time of his death. 

But I am just guessing at what has occurred here!

Keep_pedalling

I am assuming what your are trying to say is that when her father dies he left his share of his house to his children and that the house has subsequently been sold on the death of his spouse.

Normally when this is done the surviving spouse is given a life interest which means CGT is not due, but if he did not include that in his will then there could well be a CGT liability.

Can you clarify this please? It would also be useful to see the wording uses for this bequest in his will.

boomish

Thanks for the replies apologies if I made it confusing, your both correct the house was split between my wife’s mother & their children when her father passed away, I think to avoid tax later on, now her mother has passed away & the estate has been sold, what the solicitor has said is she will owe CGT on the value increase of her property share from when it was valued at the time her father passed to now when it has been sold. 

As both were given to her after costs there is nothing to put on the government CGT form? I.E. her father paid for his will to be carried out when she received her share of the property and her mothers estate paid for the sale of everything. I presume this is correct it’s not easy work out from the tax help guides.  
The gov.uk CGT basically asks the value of the property when she received it and when she sold it but also mentions what costs can be deducted.
 I hope that makes sense, I still don’t feel I’ve explained it well  
Many thanks in advance..

[Deleted User]

The ‘cost’ for the share that she received from her father would be the value of that share at the time of his death. 

Has your wife now received an additional share as the result of her mother’s passing? For example: at the time of father’s death the house was split four ways - your wife’s mother and three children. Your wife owns one quarter. Now, upon her mother’s death she acquires one third of her mother’s quarter - one twelfth. 

Keep_pedalling

Was you MIL given a life interest in her husband’s share? That would be the normal way of doing things in a professionally drawn up will. In addition to protecting his share of the house it would also offer greater security to the survivor, and avoid any CG liability.

boomish

[Deleted User] said:

The ‘cost’ for the share that she received from her father would be the value of that share at the time of his death. 

Has your wife now received an additional share as the result of her mother’s passing? For example: at the time of father’s death the house was split four ways - your wife’s mother and three children. Your wife owns one quarter. Now, upon her mother’s death she acquires one third of her mother’s quarter - one twelfth. 

Thanks for the reply, the estate was valued and sold so she received the total value of the estate to the three children but part of that consisted her share so the solicitor has paid inheritance tax on the estate passed to her but has advised her of her share worth that’s separate from the estate for which she has to pay CGT. Hope that makes sense.

boomish

Keep_pedalling said:

Was you MIL given a life interest in her husband’s share? That would be the normal way of doing things in a professionally drawn up will. In addition to protecting his share of the house it would also offer greater security to the survivor, and avoid any CG liability.

I’m unsure of a life interest , it was quite complex & I think they did a good job on cutting down the inheritance tax, but as my wife inherited a share of the house some years ago via her father she is responsible for CGT now it’s sold the solicitor has advised I’ll  find the exact solicitors wording ..

Keep_pedalling

boomish said:

Keep_pedalling said:

Was you MIL given a life interest in her husband’s share? That would be the normal way of doing things in a professionally drawn up will. In addition to protecting his share of the house it would also offer greater security to the survivor, and avoid any CG liability.

I’m unsure of a life interest , it was quite complex & I think they did a good job on cutting down the inheritance tax, but as my wife inherited a share of the house some years ago via her father she is responsible for CGT now it’s sold the solicitor has advised I’ll  find the exact solicitors wording ..

It’s more the wording of his will with regards to how he left his share of the house that is important.

NorthYorkie

You really need to get the solicitor to advise you on the entries needed on the CGT return - I can't make out what has happened.

sheramber

if costs were paid by the estate before she received her share then surely the costs have already been deducted from the gain so the the amount of costs in none.