Capital Gains Tax on property value increase

MLambers

Hi - for IHT I had my father’s house valued by an RICS surveyor with a redbook survey, and paid the IHT on that basis.

About six months later, with some smartening-up and freshening-up of the house, I have sold it for about 15% more than the survey valuation used for IHT. 

As I understand it, I now have to pay CGT on that increase, before I can finalise the estate, is that correct? And if that’s right, what’s the process for that?

thanks!

Keep_pedalling

You will need to file a tax return using SA 900 and supplementary sheet 905

https://www.gov.uk/government/publications/self-assessment-trust-and-estate-tax-return-sa900

p00hsticks

For a 'normal' sale, the CGT needs to be paid within 60 days of completion - I'n not sure if there is any additional time given for estates....

Keep_pedalling

p00hsticks said:

For a 'normal' sale, the CGT needs to be paid within 60 days of completion - I'n not sure if there is any additional time given for estates....

Good point, there is no additional time given to estates.

https://www.gov.uk/government/publications/capital-gains-tax-payments-on-property-disposal-time-limit-extension/capital-gains-tax-payments-on-property-disposal-time-limit-extension

MLambers

Many thanks all. I only see forms for the 2020-21 tax year and earlier, but this capital gain will arise in the 2021-22 tax year as the sale completes next week. So how does that work?

Presumably people can’t file within 60 days if they have to wait for the end of the tax year for the forms to become available…..? 

Thanks!

p00hsticks

MLambers said:

Many thanks all. I only see forms for the 2020-21 tax year and earlier, but this capital gain will arise in the 2021-22 tax year as the sale completes next week. So how does that work?

Presumably people can’t file within 60 days if they have to wait for the end of the tax year for the forms to become available…..? 

Thanks!

I'm not convinced that the forms/process  Keep Pedalling has mentioned are necessarily correct (but have no personal experience of the issue).

Have a read through this link

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

BooJewels

I've been watching this thread as I'm in the same position; we just [finally] completed this week.

I'm with @p00hsticks on this, I don't think that's the right form - for this scenario.  I've spent quite a bit of time on the phone with HMRC trying to sort this out (can't get into the Government Gateway as I don't have a passport - I used to be able to) and a gentleman with very poor English emailed me a form that was about paying CGT through PAYE which doesn't apply either

I spoke to a lovely chap earlier who said that CGT was so specialist and potentially very complicated with trusts etc., that they have a specific team, that you can't ring directly and the general tax advisers are only trained to a modest level.  I have a call back waiting for someone to ring me from that team to set the ball rolling I hope.  He asked me the date of the sale as I think things may have changed recently, same as Probate did from the start of the year.  I quoted the form above today in case that was the one I needed, as I still had it open at the time and he said that wasn't the one for me either.

So I'll post back if I learn anything worthwhile.  I suspect I won't now hear anything until Monday.

Hal17

I am just in the process of doing this myself and have been sent a form PPDCGT which I requested by ringing the helpline. It arrived in about 3 days.

BooJewels

Ah @Hal17 - that's the form I was emailed - as a Docx and as I don't have Word, it's come out a bit scrambled in Open Office.   I was going to wait for the printed version he's also posted.

I had wanted to pay from the estate as there's more than one beneficiary - but that appears to be a personal tax form for an individual.  The questions in it don't really fit our situation.

thegreenone

p00hsticks

Have a read through this link

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

When you receive the final statement from the solicitor you need to log on to Poohsticks link and file that way - almost all online.  That's what I did for my late Mum's flat sale. The website did the calculations, they sent me a letter and I paid online. Done. 

You don't need to do a personal tax return UNLESS you are due to do one for 5 April.  If you are, you can put it on that.  I wasn't so did the separate one.  I'm form-adverse but it was so easy.

BooJewels

Unfortunately @thegreenone you need to be able to log on to the Government Gateway to do that and because you now need a passport to do so, I'm 'digitally excluded'.

Did you do it for the estate (i.e. there were other beneficiaries) or just for yourself?  My sister is the other executrice, so it's possible that she could do it, but it's a bit of a matter of principle with me - if the Government want my money, why should I jump through hoops to give it to them.