Did I overpay CGT?

pkmid

BarelySentientAI said:

pkmid said:

thegreenone said:

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?

This is the one I chose.   You are the Property Owner because you are the Executor of your Mum's Estate.

You clicked on the right one but, as above, your mother's estate is liable for the CGT and it's nothing to do with your personal allowance. 

Contact HMRC.

Thank you, do you think that means I owe more than I thought? I'm on hold with HMRC at the moment 42+ minutes and counting.... When I say "I owe" it can be used as "the estate owes" as it was only me.

Be careful thinking that - it isn't the same thing.  People have got very worried about debts that the estate owed because they thought (as the only executor or only beneficiary) that they would have to pay it out of their own money.

What this is all about is how much tax the estate should have paid before distributing the residue.

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

pkmid

BarelySentientAI said:

pkmid said:

thegreenone said:

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?

This is the one I chose.   You are the Property Owner because you are the Executor of your Mum's Estate.

You clicked on the right one but, as above, your mother's estate is liable for the CGT and it's nothing to do with your personal allowance. 

Contact HMRC.

Thank you, do you think that means I owe more than I thought? I'm on hold with HMRC at the moment 42+ minutes and counting.... When I say "I owe" it can be used as "the estate owes" as it was only me.

Be careful thinking that - it isn't the same thing.  People have got very worried about debts that the estate owed because they thought (as the only executor or only beneficiary) that they would have to pay it out of their own money.

What this is all about is how much tax the estate should have paid before distributing the residue.

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

BarelySentientAI

pkmid said:

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

No, I mean the CGT.  The estate had an asset that it sold.  It pays the tax, and then what's left is split.

pkmid said:

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

Well if it should have come from the estate before the split, all the beneficiaries should pay based on that split.

You shouldn't have paid the original CGT out of only your share (if you did), and if there is any extra to pay (or any refund) then that also shouldn't be just out of your share.

pkmid

BarelySentientAI said:

pkmid said:

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

No, I mean the CGT.  The estate had an asset that it sold.  It pays the tax, and then what's left is split.

pkmid said:

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

Well if it should have come from the estate before the split, all the beneficiaries should pay based on that split.

You shouldn't have paid the original CGT out of only your share (if you did), and if there is any extra to pay (or any refund) then that also shouldn't be just out of your share.

I understand that, I didn't even know about CGT until I got a letter about it about 3-4 months after it had sold and the money was already split. It's my first time doing anything like this and it's been hard. I didn't mind paying the CPT out of only my share as I'm better off financially compared to my brother who just bought a new house, I was able to pay off my mortgage with the money. All I want/need to know is that I've done it alright, I've got until 6 May according to my letter. I just wish it was easier to get a straight answer. I'm currently on 1hr 6 minutes waiting to speak to HMRC.

BarelySentientAI

pkmid said:

BarelySentientAI said:

pkmid said:

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

No, I mean the CGT.  The estate had an asset that it sold.  It pays the tax, and then what's left is split.

pkmid said:

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

Well if it should have come from the estate before the split, all the beneficiaries should pay based on that split.

You shouldn't have paid the original CGT out of only your share (if you did), and if there is any extra to pay (or any refund) then that also shouldn't be just out of your share.

I understand that, I didn't even know about CGT until I got a letter about it about 3-4 months after it had sold and the money was already split. It's my first time doing anything like this and it's been hard. I didn't mind paying the CPT out of only my share as I'm better off financially compared to my brother who just bought a new house, I was able to pay off my mortgage with the money. All I want/need to know is that I've done it alright, I've got until 6 May according to my letter. I just wish it was easier to get a straight answer. I'm currently on 1hr 6 minutes waiting to speak to HMRC.

So I think it's even more complicated - but I'm not a tax expert.

Points that I think are true based on a sale in Sept 2023:

An estate pays CGT at 28%.
The estate gets the £6k CGT exempt amount but no personal allowance.
PRR might apply because a beneficiary of the estate was occupying the property as their main residence (your brother).

pkmid

BarelySentientAI said:

pkmid said:

BarelySentientAI said:

pkmid said:

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

No, I mean the CGT.  The estate had an asset that it sold.  It pays the tax, and then what's left is split.

pkmid said:

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

Well if it should have come from the estate before the split, all the beneficiaries should pay based on that split.

You shouldn't have paid the original CGT out of only your share (if you did), and if there is any extra to pay (or any refund) then that also shouldn't be just out of your share.

I understand that, I didn't even know about CGT until I got a letter about it about 3-4 months after it had sold and the money was already split. It's my first time doing anything like this and it's been hard. I didn't mind paying the CPT out of only my share as I'm better off financially compared to my brother who just bought a new house, I was able to pay off my mortgage with the money. All I want/need to know is that I've done it alright, I've got until 6 May according to my letter. I just wish it was easier to get a straight answer. I'm currently on 1hr 6 minutes waiting to speak to HMRC.

So I think it's even more complicated - but I'm not a tax expert.

Points that I think are true based on a sale in Sept 2023:

An estate pays CGT at 28%.
The estate gets the £6k CGT exempt amount but no personal allowance.
PRR might apply because a beneficiary of the estate was occupying the property as their main residence (your brother).

thank you, I finally got through to them. You're right about the £6k, that's what I should've put in the calculator and when I did the return there is apparently a box to say you were a personal rep, I need to reduce my ownership to 0 and re-do my return. I think I have done it right now as the difference is about £200 extra needed. I need to change the return (which I only found out I can't online AFTER I ended the conversation). Get the refund from that then I can do a new one with the new figure.

p00hsticks

pkmid said:

BarelySentientAI said:

pkmid said:

BarelySentientAI said:

pkmid said:

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

No, I mean the CGT.  The estate had an asset that it sold.  It pays the tax, and then what's left is split.

pkmid said:

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

Well if it should have come from the estate before the split, all the beneficiaries should pay based on that split.

You shouldn't have paid the original CGT out of only your share (if you did), and if there is any extra to pay (or any refund) then that also shouldn't be just out of your share.

I understand that, I didn't even know about CGT until I got a letter about it about 3-4 months after it had sold and the money was already split. It's my first time doing anything like this and it's been hard. I didn't mind paying the CPT out of only my share as I'm better off financially compared to my brother who just bought a new house, I was able to pay off my mortgage with the money. All I want/need to know is that I've done it alright, I've got until 6 May according to my letter. I just wish it was easier to get a straight answer. I'm currently on 1hr 6 minutes waiting to speak to HMRC.

So I think it's even more complicated - but I'm not a tax expert.

Points that I think are true based on a sale in Sept 2023:

An estate pays CGT at 28%.
The estate gets the £6k CGT exempt amount but no personal allowance.
PRR might apply because a beneficiary of the estate was occupying the property as their main residence (your brother).

thank you, I finally got through to them. You're right about the £6k, that's what I should've put in the calculator and when I did the return there is apparently a box to say you were a personal rep, I need to reduce my ownership to 0 and re-do my return. I think I have done it right now as the difference is about £200 extra needed. I need to change the return (which I only found out I can't online AFTER I ended the conversation). Get the refund from that then I can do a new one with the new figure.

also note that I believe they are right about the tax rate - for the estate the rate used needs to be 28%, not the 18% you used originally. 

pkmid

p00hsticks said:

pkmid said:

BarelySentientAI said:

pkmid said:

BarelySentientAI said:

pkmid said:

I know I just figure it comes from the money of selling the house, the estate value is just split between myself and my brother since she passed. With inheritence tax (if that's what you mean by the second point) when I had probate done it was under the £500k threshold.

No, I mean the CGT.  The estate had an asset that it sold.  It pays the tax, and then what's left is split.

pkmid said:

Similarly how do you pay from an estate that is non-existent since all assets/values have been shared out?

Well if it should have come from the estate before the split, all the beneficiaries should pay based on that split.

You shouldn't have paid the original CGT out of only your share (if you did), and if there is any extra to pay (or any refund) then that also shouldn't be just out of your share.

I understand that, I didn't even know about CGT until I got a letter about it about 3-4 months after it had sold and the money was already split. It's my first time doing anything like this and it's been hard. I didn't mind paying the CPT out of only my share as I'm better off financially compared to my brother who just bought a new house, I was able to pay off my mortgage with the money. All I want/need to know is that I've done it alright, I've got until 6 May according to my letter. I just wish it was easier to get a straight answer. I'm currently on 1hr 6 minutes waiting to speak to HMRC.

So I think it's even more complicated - but I'm not a tax expert.

Points that I think are true based on a sale in Sept 2023:

An estate pays CGT at 28%.
The estate gets the £6k CGT exempt amount but no personal allowance.
PRR might apply because a beneficiary of the estate was occupying the property as their main residence (your brother).

thank you, I finally got through to them. You're right about the £6k, that's what I should've put in the calculator and when I did the return there is apparently a box to say you were a personal rep, I need to reduce my ownership to 0 and re-do my return. I think I have done it right now as the difference is about £200 extra needed. I need to change the return (which I only found out I can't online AFTER I ended the conversation). Get the refund from that then I can do a new one with the new figure.

also note that I believe they are right about the tax rate - for the estate the rate used needs to be 28%, not the 18% you used originally. 

yeah the calculator has a mixture.. I've started a new return and now the figure is £3,800....

GDB2222

propertyrental said:

* you did not inherit the property - it was never transferred into your name

* you personally never owed any CGT as you never owned the property

* your brother never owed any CGT as he never owned the property

* the increase in value between Probate and sale could either have been subject to

a) CGT owed by the estate, or

b) revaluation of the probate value which might have impacted on Inheritance tax

There was roughly a two year period between the date the OP’s mother died and the date the property was sold. It’s reasonable to expect that property values increased by the amount of the gain. So, are there any grounds for revaluation of the probate value?

Bookworm105

_Penny_Dreadful said:

The above being moot if you yourself never incurred a capital gain in the first place.

which is precisely the point, the sale was undertaken by the estate and therefore the estate incurred the CGT liability not the two brothers as (living) owners of a property registered in their (joint) names.