Administrator of Estate

Steve_Eagles

My mother died intestate. I obtained letter of administration so her house could be sold and the proceeds shared between me and my three siblings under intestate law. The house had a charge on it in favour of the local authority for care home fees. For reasons not necessary to go into here there was a delay in selling the house which sold for more than the valuation at the time of her death. 

1) can I deduct the amount of charge on the house from  the selling price for CGT
2) Can all siblings use their annual exception amount to offset the CGT?

Thank you

Dazed_and_C0nfused

Are you conflating two things with point 2?

Who sold the house, the estate or the beneficiaries?

[Deleted User]

I doubt that you could ever claim the charge as an expense against capital gains - the charge was, after all, to pay care home fees and had nothing to do with the property. 

Steve_Eagles

I sold the property as administrator but only benefited by a quarter as a beneficiary 

BoGoF

Steve_Eagles said:

I sold the property as administrator but only benefited by a quarter as a beneficiary 

So effectively the Estate sold it and is liable so can't use individuals CGT allowance

Grumpy_chap

Steve_Eagles said:

My mother died intestate. I obtained letter of administration so her house could be sold and the proceeds shared between me and my three siblings under intestate law. The house had a charge on it in favour of the local authority for care home fees. For reasons not necessary to go into here there was a delay in selling the house which sold for more than the valuation at the time of her death. 

1) can I deduct the amount of charge on the house from  the selling price for CGT
2) Can all siblings use their annual exception amount to offset the CGT?

Thank you

1.  No
2.  No

Keep_pedalling

The charge does not affect the capital gain and you need to pay both the charge and the CGT bill before you distribute the proceeds to the beneficiaries for which you only get one allowance. You can however deduct the selling costs from the gain on top of the £6k allowance.

How did you originally value the house?

Steve_Eagles

Case is complicated suffice to say we were unable to get a valuation at time of death and the only official one we had was from about 4 - 5 years previous

BoGoF

Steve_Eagles said:

Case is complicated suffice to say we were unable to get a valuation at time of death and the only official one we had was from about 4 - 5 years previous

So are you saying the valuation for IHT might be inaccurate? Some dates might help as to what haa actually happened.

Hoenir

Steve_Eagles said:

Case is complicated suffice to say we were unable to get a valuation at time of death and the only official one we had was from about 4 - 5 years previous

A RICS surveyor will able to produce a report substantiating the value of the property on the date on which your late mother died. This will be adequate for HMRC CGT purposes.