Cap Gains tax - Selling an inherited home, now jointly owned

roxy48

I wonder if anyone can help?  my original post was about SDLT and Capital Gains Tax.  The SDLT bits were well answered, so this one is just about Capital Gains.

Three years ago, a friend & her sister inherited a house which has been rented.  They both own separate houses with their spouses. They are now looking to either   a) put the inherited house on the market or b) one of them will buy the other out, AND MOVE INTO IT.

I've been trying to offer advice but am not best placed to do so except I do at least know of this forum 

My questions

1) If the two sisters sell the house to someone else at 500k and the value when inherited was 400k, does each sister have a Capital gains tax liability on the increase of 50k each?  Is there a time limit on any sale after inheritance which would avoid this liability.  I think I read somewhere you have to sell within 2 years to avoid that liability.

2) If one sister buys the other out for 250k then that sister has to pay SDLT but the seller that sold her half and receives the 250k, still has a CG liability of 50k- is that right?

Many thanks in advance  Roxy48

Keep_pedalling

1. There is no time limit, but if sold shortly after inheriting it could be IHT that might apply instead of CGT. Selling would give each of them a CG of £50k (less 50% of selling costs)

2. Yes the seller will have a £50k CG.

roxy48

Keep_pedalling said:

1. There is no time limit, but if sold shortly after inheriting it could be IHT that might apply instead of CGT. Selling would give each of them a CG of £50k (less 50% of selling costs)

2. Yes the seller will have a £50k CG.

So for the seller of a half share, the CG of 50k is the same whether sold to sister or on open market.  And the other sister either buys it and pays SDLT,  or has the same 50k liability if selling on open market.   Thanks very much!