Did I overpay CGT?

pkmid

Oh boy, I'm really confused. The house was still in her name as the estate when we sold out._Penny_Dreadful said:

pkmid said:

p00hsticks said:

pkmid said:

thegreenone said:

If you did it online, HMRC would have written to confirm the amount you need to pay or query.  I know CGT rates have changed but I don't know when they changed.  Perhaps you were working to old rates but HMRC should have picked that up.

Someone with more knowledge than me will come along shortly.

I sold my late Mum's flat in 2021 and it went for £25k more than the probate estimate.  I paid £1725.25 but that was the old rates of CGT.

I did it online yeah but only based off of their calculator, it wasn't clear to me what the rules are whether I had lived in that house for most of my life or whether my brother living there had any affect on the total amount. 

As I understand it , it doesn't matter whether you or your brother lived in it either before or after your mums death, as the property has never belonged to either of you, but to your mum / your mums estate.

An estate has a single CGT allowance, which in the tax year 2023-24 was £6,000.

So as you say that you sold if for (around) £30k more than the probate value declared, you should have paid CGT on around £24k, less selling costs etc. I think (but hopefully a more knowledgeable person that I will be able to confirm) that the CGT rate for property sold from an estate  is 28%, so it does sound to me as if there is probably more CGT due if you only paid £2k. 

That's scary, there was a personal allowance of £12,570 that I could claim on? Is this not correct? With that and the capital gain exemption of £6000 it left a remainder of approx £2.5k

From the calculator:

This is the amount of your income that you don't pay tax on.

In the tax year 2023 to 2024 the UK Personal Allowance was £12,570 unless you:

• earned more than £100,000
• claimed Blind Person's Allowance
• claimed Marriage Allowance

Your personal allowance is for income tax, not capital gains tax.

Was the property ever put in the names of you and your brother or was it sold by your late mum's estate and you and your brother just received the proceeds of the sale as per her will?

pkmid

Hoenir said:

The estate has no personal allowances for income tax. 

Hi, I added in the calculator that I had inherited it. Was I not meant to include the personal allowance when asked on the calculator?

p00hsticks

pkmid said:

Hoenir said:

The estate has no personal allowances for income tax. 

Hi, I added in the calculator that I had inherited it. Was I not meant to include the personal allowance when asked on the calculator?

Not that familiar with the calculator, but I imagine not, as you hadn't at that point actually inherited it - it still belonged to the estate and you and your brother were going to inherit the proceeds of the sale....
As <edit - someone not pkmid > says, an estate does not have a personal income tax allowance, just a CGT one.  

pkmid

p00hsticks said:

pkmid said:

Hoenir said:

The estate has no personal allowances for income tax. 

Hi, I added in the calculator that I had inherited it. Was I not meant to include the personal allowance when asked on the calculator?

Not that familiar with the calculator, but I imagine not, as you hadn't at that point actually inherited it - it still belonged to the estate and you and your brother were going to inherit the proceeds of the sale....

IT's ok I'm sorry I'm just very stressed now that I've UNDER paid it. Here is a screenshot,if I make that figure 0 it means I've underpaid by approx £600 if the other poster says personal allowance doesn't apply. 

sheramber

pkmid said:

Hoenir said:

The estate has no personal allowances for income tax. 

Hi, I added in the calculator that I had inherited it. Was I not meant to include the personal allowance when asked on the calculator?

You  weren't selling it as a personal  item.

You didn't own it and had not inherited it as it was still in  your mother's estate.

You inherited the value of it once it was sold and the estate  settled.

You would have inherited it if it had been transferred to your name .

You were selling it as Personal Representative of the estate so personal allowance is not relevant .

p00hsticks

_Penny_Dreadful said:

pkmid said:

p00hsticks said:

pkmid said:

thegreenone said:

If you did it online, HMRC would have written to confirm the amount you need to pay or query.  I know CGT rates have changed but I don't know when they changed.  Perhaps you were working to old rates but HMRC should have picked that up.

Someone with more knowledge than me will come along shortly.

I sold my late Mum's flat in 2021 and it went for £25k more than the probate estimate.  I paid £1725.25 but that was the old rates of CGT.

I did it online yeah but only based off of their calculator, it wasn't clear to me what the rules are whether I had lived in that house for most of my life or whether my brother living there had any affect on the total amount. 

As I understand it , it doesn't matter whether you or your brother lived in it either before or after your mums death, as the property has never belonged to either of you, but to your mum / your mums estate.

An estate has a single CGT allowance, which in the tax year 2023-24 was £6,000.

So as you say that you sold if for (around) £30k more than the probate value declared, you should have paid CGT on around £24k, less selling costs etc. I think (but hopefully a more knowledgeable person that I will be able to confirm) that the CGT rate for property sold from an estate  is 28%, so it does sound to me as if there is probably more CGT due if you only paid £2k. 

That's scary, there was a personal allowance of £12,570 that I could claim on? Is this not correct? With that and the capital gain exemption of £6000 it left a remainder of approx £2.5k

From the calculator:

This is the amount of your income that you don't pay tax on.

In the tax year 2023 to 2024 the UK Personal Allowance was £12,570 unless you:

• earned more than £100,000
• claimed Blind Person's Allowance
• claimed Marriage Allowance

Was the property ever put in the names of you and your brother or was it sold by your late mum's estate and you and your brother just received the proceeds of the sale as per her will?

The OP has said it was left in the estate

pkmid said:

p00hsticks said:

Who was the house left to after your mother died ?
Was it left in her name (i.ee. belonged to the estate) or transferred into the names of the beneficiaries ?
Exactly when in 2023 did you exchange / complete on the sale - was it before or after April 5th ?  

it was left to myself and my brother but I was the sole executor. It was left in her name since probate was carried out and we exchanged in September 2023.

pkmid

sheramber said:

pkmid said:

Hoenir said:

The estate has no personal allowances for income tax. 

Hi, I added in the calculator that I had inherited it. Was I not meant to include the personal allowance when asked on the calculator?

You  weren't selling it as a personal  item.

You didn't own it and had not inherited it as it was still in  your mother's estate.

You inherited the value of it once it was sold and the estate  settled.

You would have inherited it if it had been transferred to your name .

You were selling it as Personal Representative of the estate so personal allowance is not relevant .

Ok but by that logic what option do you pick on the calculator?

_Penny_Dreadful

pkmid said:

Oh boy, I'm really confused. The house was still in her name as the estate when we sold out._Penny_Dreadful said:

pkmid said:

p00hsticks said:

pkmid said:

thegreenone said:

If you did it online, HMRC would have written to confirm the amount you need to pay or query.  I know CGT rates have changed but I don't know when they changed.  Perhaps you were working to old rates but HMRC should have picked that up.

Someone with more knowledge than me will come along shortly.

I sold my late Mum's flat in 2021 and it went for £25k more than the probate estimate.  I paid £1725.25 but that was the old rates of CGT.

I did it online yeah but only based off of their calculator, it wasn't clear to me what the rules are whether I had lived in that house for most of my life or whether my brother living there had any affect on the total amount. 

As I understand it , it doesn't matter whether you or your brother lived in it either before or after your mums death, as the property has never belonged to either of you, but to your mum / your mums estate.

An estate has a single CGT allowance, which in the tax year 2023-24 was £6,000.

So as you say that you sold if for (around) £30k more than the probate value declared, you should have paid CGT on around £24k, less selling costs etc. I think (but hopefully a more knowledgeable person that I will be able to confirm) that the CGT rate for property sold from an estate  is 28%, so it does sound to me as if there is probably more CGT due if you only paid £2k. 

That's scary, there was a personal allowance of £12,570 that I could claim on? Is this not correct? With that and the capital gain exemption of £6000 it left a remainder of approx £2.5k

From the calculator:

This is the amount of your income that you don't pay tax on.

In the tax year 2023 to 2024 the UK Personal Allowance was £12,570 unless you:

• earned more than £100,000
• claimed Blind Person's Allowance
• claimed Marriage Allowance

Your personal allowance is for income tax, not capital gains tax.

Was the property ever put in the names of you and your brother or was it sold by your late mum's estate and you and your brother just received the proceeds of the sale as per her will?

It is possible that your mother's estate, not you, may have incurred a CGT liability unless there was a Deed of Appropriation to sell the property on behalf of the beneficiaries rather than the estate.  There can be tax advantages to doing this as the estate would be charged CGT at the higher rate of 28% whilst if the beneficiaries are lower rate tax payers the CGT would be taxed less.

However, if there was no Deed of Appropriation, and the property was sold be your mum's estate then you should not have had any capital gain and therefore no capital gains tax liability.

Hoenir

None of those options. You are not the property owner. The estate is. The property is still in the named of the deceased. You are continuing to act in the capacity as an executor of the estate. Until such time as the ownership changes. 

BarelySentientAI

pkmid said:

sheramber said:

pkmid said:

Hoenir said:

The estate has no personal allowances for income tax. 

Hi, I added in the calculator that I had inherited it. Was I not meant to include the personal allowance when asked on the calculator?

You  weren't selling it as a personal  item.

You didn't own it and had not inherited it as it was still in  your mother's estate.

You inherited the value of it once it was sold and the estate  settled.

You would have inherited it if it had been transferred to your name .

You were selling it as Personal Representative of the estate so personal allowance is not relevant .

Ok but by that logic what option do you pick on the calculator?

You are answering as the estate of your mother not as yourself.  It isn't yours.

How did the estate get it?