Capital gains tax when someone dies

Planeahead

Really hoping that someone can help me out here and put my mind at ease.

If someone dies and leaves a property valued at 100k but property sells for 120k. There are no other assets and to keep it simple, lets say no costs involved with selling. So a gain of 20k.

There are 2 executors named on the will who are brothers. One earns 17k per year and other earns 45k per year, there are no other incomes and no gains or losses in previous years. The will states that the money from sale of house is to be split between 5 people including the 2 named as executors. 

1. Who would be liable for capital gains tax?

2. What would be the total capital gains tax exemption figure?

3. What would be figure for total capital gains tax figure owed to HMRC?

sheramber

What kind of property? 

Was the property the deceased’s residential home!?

Planeahead

sheramber said:

What kind of property? 

Was the property the deceased’s residential home!?

The property is a standard home which was the deceased residential property.

p00hsticks

Was the property still in the name of the deceased when sold ?
If so, my understanding is that the estate has one CGT allowance (currently £6k) that can be used.

I don't think it's relevant whether it was the OP's residence for CGT purposes once they've died, as any CGT due would only be on the difference between the value at the time of death as given for probate and te eventual selling price. (In general, it could make a difference to any IHT calculations if they were leaving it to descendants, although in this case the estate is well below IHT terrritory anyway).

     

lincroft1710

Was this an actual gain or was the property in fact undervalued at the date of death, which would seem more probable if there was a 20% increase in value?

Grumpy_chap

What was the time period between the death and the property sale?

[Deleted User]

p00hsticks said:

Was the property still in the name of the deceased when sold ?
If so, my understanding is that the estate has one CGT allowance (currently £6k) that can be used.

I don't think it's relevant whether it was the OP's residence for CGT purposes once they've died, as any CGT due would only be on the difference between the value at the time of death as given for probate and te eventual selling price. (In general, it could make a difference to any IHT calculations if they were leaving it to descendants, although in this case the estate is well below IHT terrritory anyway).

     

Moreover, if the probate value (if there was one) was somehow £20000 below the sale price (before deducting costs of sale etc) there are five owners. No CGT. 

p00hsticks

purdyoaten2 said:

p00hsticks said:

Was the property still in the name of the deceased when sold ?
If so, my understanding is that the estate has one CGT allowance (currently £6k) that can be used.

I don't think it's relevant whether it was the OP's residence for CGT purposes once they've died, as any CGT due would only be on the difference between the value at the time of death as given for probate and te eventual selling price. (In general, it could make a difference to any IHT calculations if they were leaving it to descendants, although in this case the estate is well below IHT terrritory anyway).

     

Moreover, if the probate value (if there was one) was somehow £20000 below the sale price (before deducting costs of sale etc) there are five owners. No CGT. 

My understanding is that there would only be five owners if the property was actually transferred into their names after probate but prior to the sale. If it was still in the name of the deceased at the point of sale, the 'owner' is the estate which, as I said above has a single CGT allowance of its own. 

Keep_pedalling

The income of the executors does not come into it, if they sold the house on behalf of the estate then the estate pays the CGT and the rate for estates is 28% with only one £6k allowance available. 

With estates well out of IHT territory you should value the house on the high side to avoid falling into the CG trap. 

[Deleted User]

p00hsticks said:

purdyoaten2 said:

p00hsticks said:

Was the property still in the name of the deceased when sold ?
If so, my understanding is that the estate has one CGT allowance (currently £6k) that can be used.

I don't think it's relevant whether it was the OP's residence for CGT purposes once they've died, as any CGT due would only be on the difference between the value at the time of death as given for probate and te eventual selling price. (In general, it could make a difference to any IHT calculations if they were leaving it to descendants, although in this case the estate is well below IHT terrritory anyway).

     

Moreover, if the probate value (if there was one) was somehow £20000 below the sale price (before deducting costs of sale etc) there are five owners. No CGT. 

My understanding is that there would only be five owners if the property was actually transferred into their names after probate but prior to the sale. If it was still in the name of the deceased at the point of sale, the 'owner' is the estate which, as I said above has a single CGT allowance of its own. 

Yes - I see that from the original post now. 

Planeahead

lincroft1710 said:

Was this an actual gain or was the property in fact undervalued at the date of death, which would seem more probable if there was a 20% increase in value?

The property was undervalued at time of probate which was only obtained last week. Is it possible to have this changed?