CGT

Hoenir

Nickyno said:

 They did the probate/letters of administration themselves, with the house and belongings (estate totalling £125,000 gross and £120,000 net after funeral expenses). 

Undervaluing the house did them no favours. 

Nickyno

Keep_pedalling said:

Have contracts already been exchanged?

Not yet, the person who made the offer on the house is taking her partner round to view it today.

poseidon1

Nickyno said:

Keep_pedalling said:

Have contracts already been exchanged?

Not yet, the person who made the offer on the house is taking her partner round to view it today.

https://www.gov.uk/government/publications/whole-of-registered-title-assent-as1/guidance-how-to-complete-form-as1

Above is the link to the Assenting process and form, which could assist the beneficiaries in reducing the CGT exposure on the proposed house sale.

However I note, that there has been no solicitor involved up to this point and the beneficiaries have dealt with all estate administration matters themselves.

In the absence of a solicitor to help complete form AS1, they should immediately approach the conveyancer who will be handling the property sale to determine if completion of AS1 could be undertaken pre-sale, the cost of doing so and whether this cost justifies the proposed tax saving.

Given the modest size of the estate and associated CGT exposure, the beneficiaries might consider the Assenting process too much hassle to avoid the 24% estate CGT tax rate in question. 

Nickyno

They have a solicitor involved in the sale of the property and a conveyancer

So would the CGT be
£131,000 (sale price) - £120,000 (probate net value) = £11,000 (capital gain)

£11,000 ÷ 100 = £110 x 24

CGT Payable £2640.00?

poseidon1

Nickyno said:

They have a solicitor involved in the sale of the property and a conveyancer

So would the CGT be
£131,000 (sale price) - £120,000 (probate net value) = £11,000 (capital gain)

£11,000 ÷ 100 = £110 x 24

CGT Payable £2640.00?

No, there will be estate agents and solicitors fees to be deducted from the sale proceeds before arriving at the net profit. Thereafter, the executor's £3000 exemption is then deducted from that profit, so CGT at 24% should be considerably less than your estimate. 

Nickyno

poseidon1 said:

Nickyno said:

They have a solicitor involved in the sale of the property and a conveyancer

So would the CGT be
£131,000 (sale price) - £120,000 (probate net value) = £11,000 (capital gain)

£11,000 ÷ 100 = £110 x 24

CGT Payable £2640.00?

No, there will be estate agents and solicitors fees to be deducted from the sale proceeds before arriving at the net profit. Thereafter, the executor's £3000 exemption is then deducted from that profit, so CGT at 24% should be considerably less than your estimate. 

There are 3 beneficiaries, who are also the administrators, is it just the £3000 or do they all have a £3000 exemption 

RAS

Not sure that your question is clear?

But if you are asking whether each beneficiary has a £3k CGT allowance, that is correct.

You need to weigh up if the cost of organising the assent is less than the CGT bill if you leave the house with the estate. That's going to be £1600-£2k, depending on the cost of the legal and EA fees on the sale.

And obviously depends on the beneficiaries not having used up their personal CGT allowance selling other assets in the same year.

Nickyno

RAS said:

Not sure that your question is clear?

But if you are asking whether each beneficiary has a £3k CGT allowance, that is correct.

You need to weigh up if the cost of organising the assent is less than the CGT bill if you leave the house with the estate. That's going to be £1600-£2k, depending on the cost of the legal and EA fees on the sale.

And obviously depends on the beneficiaries not having used up their personal CGT allowance selling other assets in the same year.

The EA fees will be £1680 Inc Vat and the Solicitors £726 Inc Vat. No beneficiaries have used their CGT allowance.

Keep_pedalling

RAS said:

Not sure that your question is clear?

But if you are asking whether each beneficiary has a £3k CGT allowance, that is correct.

You need to weigh up if the cost of organising the assent is less than the CGT bill if you leave the house with the estate. That's going to be £1600-£2k, depending on the cost of the legal and EA fees on the sale.

And obviously depends on the beneficiaries not having used up their personal CGT allowance selling other assets in the same year.

Once you deduct the selling costs CGT is going to be in the same ball park so the simple solution is for CGT to be payed by the estate. 

Nickyno

So would the CGT be

£131,000 (sale price) - £120,000 (probate net value) = £11,000 (capital gain)

£11,000 less EA £1680 - solicitor £726= £7594 - £3000=£4594 ÷100 = £45.94 x 24

CGT Payable £1102.56?

Or can anyone does me the calculation