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Reporting CGT liability on rental property

I am assisting my sister in law with reporting a CGT liability on a property she has just sold. It is in Scotland if that makes any difference.

I know that it is normally reported using an HMRC CGT account but there are some complications in this case and I'm not sure if the online form will be able to deal with it. The house was purchased by her and her husband in 2010 with 47% shares each and the rest to their children. In 2018 her husband died and she inherited his 47% share by survivorship. We had an RICS valuation done for probate purposes in 2018.

So she acquired her share at two different times and at two different values.  It turns out that there is a capital gain on the first share but she has suffered a loss on the second share since 2018. 

My first question is whether the gain and loss on the two shares can be combined to produce a net total gain?

The net gain is around £20000 so still a CGT liability to pay.

Second question is whether the online reporting system will be able to handle this situation. In the section about the acquisition of the property you have to select either "inherited" or " purchased" - not both. In this case both are applicable for the different shares of the property with different acquisition values. How do we deal with this situation - does the gain need to be reported in a different way?



  • Jeremy535897
    Jeremy535897 Posts: 10,469 Forumite
    First Anniversary First Post Name Dropper
    There is one capital gains tax computation for the 94% and you deduct from the sale proceeds (94%) the probate value in 2018 of 47% plus the price paid for 47% in 2010. You also deduct the appropriate proportion of buying and selling costs, and qualifying improvements. There is no reason why the online form cannot cope with this. As to whether to say it is inherited or purchased, I would assume that HMRC want to be notified if a value is used so that they have the chance to dispute it. I am not familiar with the form, but if there is anywhere to enter some sort of written explanation, use that space to set out the circumstances.
  • TcpnT
    TcpnT Posts: 278 Forumite
    First Anniversary Name Dropper First Post
    Thanks for your reply. You have confirmed my understanding of the calculation. We have all the figures so should be straightforward.
    As for completing the return form I will suggest that she registers and creates an account and then see if the necessary options are available. If not we will do our best to give an explanation and ensure that we enter the figures in such a way that the tax payable calculation comes up with the correct number.
  • herebeme
    herebeme Posts: 202 Forumite
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    You can always phone HMRC. I’ve always found their agents very helpful (though I’ve never tried the CGT dept). 
    There’s always a crushing long hold on the phone though, but hang in there, it’s probably worth it. I’d have done all your sums first and looked at the online form, so you have specific form related questions ready. 
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