Inheritance - Capital Gains?

I have inherited an equal share of my mum's estate along with my brother. The estate comprises of around 7.5k in the bank and a house which was valued at around 85k at the beginning of the pandemic. 
Due to some family disagreements etc. Probate took longer than expected and we have only just rec'd a grant of probate a couple of months ago. We have already racked up nearly £2000 in solicitors fees over this due to people dragging feet producing documents etc and there has been a lot of bad feeling (there are 4 siblings but only two of us stand to inherit) because of the legal costs and the ongoing damage to family relationships and with a view to drawing the whole sorry matter to a close quickly - I have agreed that my brother (the other beneficiary) can buy me out for a total of £35000. Considerably less than a half share of what the estate was understood to be worth two years ago. 
My solicitor has now informed me that I could be liable to pay Capital Gains tax on my pay out. I have sought some financial advice and they have suggested that I could take out an indemnity but that a solicitor will need to broker said indemnity. I've gone back to my solicitor who now says she has never heard of such an indemnity and wouldn't know how it would work in practice. Financial adviser says I need the solicitor to clarify what she meant by an indemnity. Solicitor says she has never heard of it despite the fact that she brought it up in the first place.
The house has not yet been transferred into our names. I've tried googling for some clarification but instead I'm completely confused and nonplussed even more than I was to begin with. Am I liable to pay Capital Gains tax on this given that I'm selling at less than market value or do I really need an indemnity or is someone somewhere trying to sell me a product I don't need.
I'm confused because I haven't really made a gain. Surely my brother buying my share is just the final division of assets and as such I shouldn't have to pay.
Can anyone clarify? 


  • edited 9 June 2022 at 4:28PM
    Keep_pedallingKeep_pedalling Forumite
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    edited 9 June 2022 at 4:28PM
    How much is the house worth today, and is it still held by the estate or has ownership been transferred to you and your sibling?

    If you do owe CGT on the sale of your share then it has to be paid within 6o days of the sale and I have no idea of how indemnity insurance can be of any use here.

    if the value of the house has not increased very much then CGT might not be an issue. For example if it is now worth £100k then the gain in value is £15,000. Selling your share to a connected person (your brother) will be treated as a sale at full market value regardless of how much he actual pays, so in the case of this example your gain would be £7,500 but you have an annual allowance of £12,300 so no CGT to pay. 

    In order for you to be liable for CGT on the transaction the value at the point of sale would have to exceed £110,000 allowing for selling costs and assuming you have no other gains to take into account.
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