capital gains on house inheritance and improvement

stv19m35

I have recently inherited a house. Qn 1. Is there any capital gains to pay if I sell it? Qn 2. I done some improvements so am I liable to CGT  on the difference between the probate value and the selling price? Qn 3. I have sons living abroad so if I do a deed of variation to them, will they be liable to any CGT? Thanks in advance.

theartfullodger

If there is a big enough gain in value between when you became owner and when you sell, if not living in it (genuinely) then yes, CGT payable.

I and my sister paid CGT on our late brother's house when went up quite a bit between when we got it & when sold.

Quite right too.

Btw Declared and paid within 60 dats if sale.  Then part of SA..

p00hsticks

stv19m35 said:

I have recently inherited a house. 

Has the property actually been transferred into your name or is it still owned by the estate ?  

stv19m35 said:

 Qn 1. Is there any capital gains to pay if I sell it? 

If the selling price is higher than the value declared for probate, and it has not been your main residence since inheriting it, then there will potentially be CGT to be paid, either by the estate or, if transferred into your name, by you personally.  

stv19m35 said:

 Qn 2. I done some improvements so am I liable to CGT  on the difference between the probate value and the selling price? 

Some forms of improvements (and selling costs)  can be allowed for when calculating any CGT due. 

stv19m35 said:

 Qn 3. I have sons living abroad so if I do a deed of variation to them, will they be liable to any CGT? Thanks in advance.

In general, a deed of variation can be done up to two years after the death, but I'm not sure it's possible if the property has already been transferred into your name.  I don't think the fact that they live abroad would avoid CGT being due, although it may reduce the bill a bit as they would potentially each have a CGT allowance to use - the Cutting Tax board may be a better place to ask. 

silvercar

Deed of variation means they inherit directly, as if you were never named. This does mean that they each have a CGT allowance, if not used elsewhere. As the property is in the UK, they will be liable for CGT on any gain. Basic calculation is sale price less Probate value less selling costs. You may be able to deduct improvements if they were improvements rather than maintenance. Then the gain is split 3 ways, each declaring it and paying tax, less their allowances.