Repairs to house before probate - Final update

CruisingSaver

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Keep_pedalling

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Providing you have not undervalued it at the probate stage. Whether you sell it as it is or after renovation GGT will apply if the sale price is higher than the probate price. 

CruisingSaver

Keep_pedalling said:

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Providing you have not undervalued it at the probate stage. Whether you sell it as it is or after renovation GGT will apply if the sale price is higher than the probate price. 

Got it. Thank you. 

macman

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Yes, because you have neither bought nor sold a property. No tax on inherited cash.

Keep_pedalling

macman said:

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Yes, because you have neither bought nor sold a property. No tax on inherited cash.

You seem to be giving out some duff info on this board tonight. The OP has not inherited cash they have inherited a house for which a probate value will need to be established. If they then sell it for more than the probate value then CGT rules apply

shiraz99

macman said:

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Yes, because you have neither bought nor sold a property. No tax on inherited cash.

But as explained, CGT is payable by the estate if there is a gain between the property valuation for probate and the final selling price. The estate does, however, have their own annual CGT allowance.

macman

Keep_pedalling said:

macman said:

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Yes, because you have neither bought nor sold a property. No tax on inherited cash.

You seem to be giving out some duff info on this board tonight. The OP has not inherited cash they have inherited a house for which a probate value will need to be established. If they then sell it for more than the probate value then CGT rules apply

But the OP has not inherited the house. They're the sole beneficiary of the estate, but it's the estate that is selling the house, and pays the CGT. 
Obviously with only one beneficiary it makes no practical difference, but the property will pass from the estate to the buyer, and the OP receives their inheritance in cash.
I interpreted the OP as asking 'will I have to pay CGT', not 'will CGT have to be paid'.

CruisingSaver

Thanks everyone. My rusty tax knowledge has started to come back to me. It’s been about 25 years since I’ve had to deal with tax in any detailed form (apart from my own of course) and even then it was corporation tax and partnership tax!

shiraz99

macman said:

Keep_pedalling said:

macman said:

CruisingSaver said:

Keep_pedalling said:

CruisingSaver said:

@Keep_pedalling probably a stupid question but does CGT still apply if the estate sells the house?

If the sale price is lower than the sales price then yes it does. You might have some deductions. Adding central heating where none exists is deductible for instance but replacing an existing boiler with a new one is not. 

So if the estate sells the house in its current condition and the proceeds from the sale come to me as my inheritance then there’s no CGT?

Yes, because you have neither bought nor sold a property. No tax on inherited cash.

You seem to be giving out some duff info on this board tonight. The OP has not inherited cash they have inherited a house for which a probate value will need to be established. If they then sell it for more than the probate value then CGT rules apply

But the OP has not inherited the house. They're the sole beneficiary of the estate, but it's the estate that is selling the house, and pays the CGT. 
Obviously with only one beneficiary it makes no practical difference, but the property will pass from the estate to the buyer, and the OP receives their inheritance in cash.
I interpreted the OP as asking 'will I have to pay CGT', not 'will CGT have to be paid'.

I think you're the only one who has 😉

BooJewels

I'm sorry for your loss.

I'm with others on this - don't get involved with the stress and delays of trying to do up a house just to sell - when the buyer might well come in and undo it all anyway.  My parents' house was in a mess too - and I was very embarrassed getting the EA in to value for probate - as the house was in poor repair in some areas and they were hoarders, with a significant mouse infestation.  We didn't actually put it up for sale until we'd evicted the furry squatters and filled 3 skips with junk.

Buyers who intend to develop prefer an 'honest' house to one that looks like it's been patched up to look better.  Once we had Probate, we spoke to the EA on Tuesday about how we'd go about putting it up for sale.  He put it up for sale on Thursday as a 'fabulous development opportunity' and it sold to the first viewer on the Saturday morning, we had a formal offer with proof of funding on the Monday - with a queue of people who were interested if it fell through.  Most of the internal walls are in a skip on the drive at the moment.  It will be unrecognisable once finished - a builder bought it for his own family home - he'd already registered with the EA to be advised if it came up for sale.

When you get it valued for Probate, err towards a bit on the high side of what you think it will sell for, so if it does sell for more, your CGT liability is minimised.  There was a delay for us for various reasons and house prices rocketed in that time, so our estate has it to pay.