Tax on sale of grandparents house

flakey321

Hi hope someone could let me know about what tax i'd be liable for on the sale of a grandparents house. My father is deceased and his mothers (my grandmother's) house is been put up for sale (my grandad is also deceased). The house is currently split in ownership between my grandparent's 4 children and where they are deceased split between their children. I have a sister so effectively i have half of a quarter share. If/when the house is sold what tax would i be liable for on the proceeds (I'm assuming i am liable for tax but happy to be dissapointed on this!)

I'm a higher rate tax payer and on PAYE. 

Really appreciate any feedback, let me know if any further details will help :-)

greatkingrat

Any Capital Gains Tax due would be based on the difference between the price of the house when it was transferred to you, and the price you sell it for.

The first £12300 of gains are tax-free, so as you only own 1/8, the price would need to have gone up by over £98400 before you have to pay anything.

Flugelhorn

So is grandmother still alive? Has the property been handed over to children and grandchildren already?

If she has passed away then the property should have stayed in the ownership of the estate and then divided from there CGT would have been payable on the difference between the valuation at probate and the value at sale. If there is a big increase then sometimes worth transferring it into infividual names to use personal CGT allowances 

Keep_pedalling

Flugelhorn said:

If she has passed away then the property should have stayed in the ownership of the estate and then divided from there CGT would have been payable on the difference between the valuation at probate and the value at sale. If there is a big increase then sometimes worth transferring it into infividual names to use personal CGT allowances 

Unless ownership was foolishly transferred while she was still alive. 

Flugelhorn

Keep_pedalling said:

Flugelhorn said:

If she has passed away then the property should have stayed in the ownership of the estate and then divided from there CGT would have been payable on the difference between the valuation at probate and the value at sale. If there is a big increase then sometimes worth transferring it into infividual names to use personal CGT allowances 

Unless ownership was foolishly transferred while she was still alive. 

it sounds like it might have done... can of worms

flakey321

greatkingrat said:

The first £12300 of gains are tax-free, so as you only own 1/8, the price would need to have gone up by over £98400 before you have to pay anything.

Thank you. I'd misunderstood some of the details and it transpires my grandma still owns 50% of it. I only have a 6.25% share of it - but i understand the principle still of what you've said

flakey321

Flugelhorn said:

Keep_pedalling said:

Flugelhorn said:

If she has passed away then the property should have stayed in the ownership of the estate and then divided from there CGT would have been payable on the difference between the valuation at probate and the value at sale. If there is a big increase then sometimes worth transferring it into infividual names to use personal CGT allowances 

Unless ownership was foolishly transferred while she was still alive. 

it sounds like it might have done... can of worms

Apologies. i'd misunderstood the details my grandma still actually owns 50% of it, therefore i have a 6.25% stake. Very much still alive but has moved into a care home now. I believe the original agreement was drawn up in 2006 (so the house will have increased a lot in value) I only actually became aware of this in 2018 when an uncle died and the legal docs needed re-signing.

Flugelhorn

so the house must have been held as tenants in common and your grandfather's "half" was left to his beneficiaries, I think the usual thing in this situation is that it is left to trustees and the names on the ownership are not changed to all the beneficiaries - have you checked what the land registry says about who owns it?

flakey321

Flugelhorn said:

so the house must have been held as tenants in common and your grandfather's "half" was left to his beneficiaries, I think the usual thing in this situation is that it is left to trustees and the names on the ownership are not changed to all the beneficiaries - have you checked what the land registry says about who owns it?

hi so yes it sounds like what you say that it's held as tennants in common.
I have found the land registry document for the recent transfer (when my uncle died and therefore needed to be updated to his 2 sons). In the Declaration of Trust statement "The transfer is more than one persion" the section that is marked is against "they are to hold the property on trust for themselves as tennants in common in the following shares as to:"...and here it states the % of each person with 50% to my grandma, myself 6.25%

sheslookinhot

Have care home fees been considered ? Would these come out your Grandma’s 50% or indeed the whole value ?

theoretica

Did your father die before 2006?  If you inherited your 6.25% from him the starting value for CGT will have been reset then.