IHT / Capital Gains

darrend2812

Hi all,
Short and sweet question and I hope someone can help advise.

I am inheriting a quarter of my late grandmothers property. The house has been valued at £500,000. The other quarters will be shared amongst three other grandchildren (4 in total including me). 

We had probate granted in 2019 and IHT was shown as NIL payable (probate valued at £304k ) however since 2019 the property has risen to a resale value of 500k. 

Question, will I have to pay IHT and Capital Gains? And if so, what would be the amount or calculation ? 
Thanks 

Keep_pedalling

No you won’t pay IHT as that is based on the value of the estate at the time of death. There is likely be a CGT liability on the sale of the property but who pays that very much depends if the property was transferred to the beneficiaries or if it is still owned by the estate.

Why the massive delay in dealing with the property?

[Deleted User]

Capital gains. 

Each have a gain:

Proceeds £125000 less base cost £76000 = £49000. 

You can also deduct costs of any improvements and legal fees when selling. 

Gain must be reported and tax paid by each within 60 days. 

https://www.gov.uk/report-and-pay-your-capital-gains-tax

darrend2812

@Keep_pedalling - Thank for your input.

The will state the property is to be sold and any proceedings to be split to the grandchildren. Not sure if that answers your question? Currently the owner of the property is still in my late grandparents name and upon sale would sold as the their estate? 

The house is to be sold due to my aunt now passing away (who lived in the property after my grandmothers death ) 

Hoenir

darrend2812 said:

 Currently the owner of the property is still in my late grandparents name and upon sale would sold as the their estate? 

The estate would incur the full CGT liability. 

[Deleted User]

darrend2812 said:

@Keep_pedalling - Thank for your input.

The will state the property is to be sold and any proceedings to be split to the grandchildren. Not sure if that answers your question? Currently the owner of the property is still in my late grandparents name and upon sale would sold as the their estate? 

The house is to be sold due to my aunt now passing away (who lived in the property after my grandmothers death ) 

All of which makes my previous post irrelevant.

darrend2812

@Hoenir - So if this is to be split across 4 individuals, is that on a per person basis or total property value? 

i.e  £500k divide by 4 = £125,000
- Do we pay Capital gains on 125,000 or £500,000? 

Hoenir

darrend2812 said:

@Hoenir - So if this is to be split across 4 individuals, is that on a per person basis or total property value? 

i.e  £500k divide by 4 = £125,000
- Do we pay Capital gains on 125,000 or £500,000? 

If the estate sell the property and then distributes the proceeds. The estate pays the CGT.  On the full £196k gain less selling costs. 

Keep_pedalling

Did the will give your aunt a life interest in the property or was this just a informal arrangement?

darrend2812

@Keep_pedalling
 - Will stipulated my aunt can live in the property until she chooses however sadly has now passed away. 

Jeremy535897

If the aunt had a life interest in the property, and has now died, the property would be treated for inheritance tax purposes as part of her estate on her death. Has her estate been dealt with for inheritance tax? For capital gains tax purposes, if it was her main residence, and she had a life interest, the property would be revalued at the date of her death for capital gains tax, and therefore little if any capital gains tax would be due.
Much will depend on the precise wording of the will and the country concerned (Scotland or England/Wales). Professional advice should be taken.