Advice please on inheritance tax

Davey777

After my father passed away, my brother and I each inherited a one-third share of the house where our mum and stepdad currently live, while my stepdad received the remaining share. Neither my brother nor I have lived in the property for over 20 years. Now, my mum and stepdad have decided to sell the house, which is valued at £540,000. My brother and I don’t plan to take our share from the sale, as we want our mum to continue having a place to live. Will my brother and I be liable for inheritance tax or capital gains tax when the house is sold?

Mark_d

I believe CGT would be payable on the gain between the inheritance and the date of sale.

theoretica

Did your father's will give your mum a life interest or was it just left to your goodwill that she continued living there?

km1500

there are many ifs and buts in your query but basically  20 years ago you inherited one third of the house each and at that point you became the legal owner of one third of the house each.

the house has increased in value since then and so yes you'll be liable to capital gains tax on the gain at market value even if you gift it away.

Davey777

thank you all for your advice. and to your question Theoretica ' no my father did not give my mum a life interest' if me and my brother took our share out of the house then we know our mum and stpedad would not be able to buy another property. the only reason for the move is my mum can't do the stairs anymore and needs a bungalow. we are not taking anything from the property, but expect we will have to find a way to pay CGT

GrumpyDil

Not sure it will help but how long ago did your father die and leave the house to you as that's not clear. 

Keep_pedalling

Davey777 said:

thank you all for your advice. and to your question Theoretica ' no my father did not give my mum a life interest' if me and my brother took our share out of the house then we know our mum and stpedad would not be able to buy another property. the only reason for the move is my mum can't do the stairs anymore and needs a bungalow. we are not taking anything from the property, but expect we will have to find a way to pay CGT

That is a shame, it would have avoided the CGT issue. 

Can you clarify the current ownership, does you mother own half of it with the rest split 3 ways or does she not own any of it? Day you know the value of the house when your father died?