Help with CGT

WelshAndy

Hi, I have recently inherited my fathers house. My wife and I own our own home, but want to sell our house and move into the inherited property. 

We bought our house for only £12,500 35 years ago. Value today would be approx £140,000. 

Would the approx amount of CGT be based the sell price of 140k minus the original purchase price of 12.5k and then minus any tax allowance applicable? Or have I got it all wrong?

ccluedo

If the house u are selling has been your primary residence since u bought it then there is no CGT to pay.

Private Residence Relief

You do not pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

• you have one home and you’ve lived in it as your main home for all the time you’ve owned it
• you have not let part of it out - this does not include having a lodger
• you have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use)
• the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
• you did not buy it just to make a gain

If all these apply you will automatically get a tax relief called Private Residence Relief and will have no tax to pay. If any of them apply, you may have some tax to pay.

eskbanker

WelshAndy said:

Hi, I have recently inherited my fathers house. My wife and I own our own home, but want to sell our house and move into the inherited property. 

We bought our house for only £12,500 35 years ago. Value today would be approx £140,000. 

Would the approx amount of CGT be based the sell price of 140k minus the original purchase price of 12.5k and then minus any tax allowance applicable? Or have I got it all wrong?

Yes, that's wrong, there'll be no CGT liability when selling your main residence:

https://www.gov.uk/tax-sell-home