Which CGT rate

MiniEggs

Hi

I am looking at the rates on this page Capital Gains Tax rates and allowances - GOV.UK (www.gov.uk)

and I'm not quite sure which one applies

I am the executor for my late fathers estate and I am selling some property. The property is still in my fathers name and part of his estate. I am not the beneficiary my mother is

There is the primary residence and a non residential property

Is the non residential 20% of the gain after expenses and allowances and probate value
Is the residential 0% because it was the primary residence but oddly this does not seem to get a mention. I fear it is 28% as I am selling as executor regardless of primary residence?

Thanks

Marcon

MiniEggs said:

Hi

I am looking at the rates on this page Capital Gains Tax rates and allowances - GOV.UK (www.gov.uk)

and I'm not quite sure which one applies

I am the executor for my late fathers estate and I am selling some property. The property is still in my fathers name and part of his estate. I am not the beneficiary my mother is

There is the primary residence and a non residential property

Is the non residential 20% of the gain after expenses and allowances and probate value
Is the residential 0% because it was the primary residence but oddly this does not seem to get a mention. I fear it is 28% as I am selling as executor regardless of primary residence?

Thanks

Were your parents married at the time of your father's death?

MiniEggs

Yes but only dad owned the house

uknick

Why do you think CGT is due?  Have the property prices increased since you submitted the IHT forms?  If so, has the increase used up the CGT allowances?

If you are correct in CGT being payable then the rate is 28% for the residential property and 20% for non residential.  There is no exception for principle residence.  I assume the HMRC logic is that a dead person can't have a primary residence they live in.

And yes, the taxable gain will be after you remove selling costs, i.e. estate agent and solicitor fees.

Keep_pedalling

If your mother is currently living in the marital home and inherited from her husband there will be no CGT regardless of any gain in value since his death. 

uknick

Keep_pedalling said:

If your mother is currently living in the marital home and inherited from her husband there will be no CGT regardless of any gain in value since his death. 

Even if it is being sold from the father's estate and never transferred to the mother?

I assumed, maybe incorrectly, there is a specific reason they were selling the properties before transferring them to the mother.  Otherwise I'd have suggested putting them in the mother's name before selling them.  At what legal point does the spousal transfer take place, on death or completion of TR1?

Edit - I think I've just answered my own question, on grant of probate/administration. 

Keep_pedalling

I think it may be necessary to do the transfer of the martial home before selling as the estate is not exempt from CGT but the OP’s mother will be (assuming she has been living there since her husband died). 

MiniEggs

Thanks all

This seems to suggest it might be exempt but mother never owned it it was solely owned by Dad but it's not 100% clear to me if the ownership bit matters?

Capital Gains Tax - Selling a property after death - PEM

PS I understand the point dead people can't live in a house and that might be the clincher

MiniEggs

This does seem to mention the 75% etc
HS283 Private Residence Relief (2021) - GOV.UK (www.gov.uk)

uknick

If you transfer the house to your mother and it's her primary residence during the time she owns it there will no CGT to pay, as stated above.

It doesn't matter whether she lived in it for numerous years before because CGT is normally only payable on an asset you own.  I say normally, because there are some parts of the CGT rules which refer to "beneficial ownership" as opposed to "actual ownership".  But, I don't think these apply to your situation.

If you don't mind me saying you do appear to be overcomplicating a pretty straight forward transaction which takes place thousands of times a year with regard to a spouse inheriting the main home.  Is there any particular reason you have raised these issues?