Capital gain of disposal of property

Dilbert_Investor

I’m just selling my fathers house having now obtained probate.  He passed away last year.

The probate value was £580k and the sale price will be £635k, so I believe CGT will be payable.

The house remains in my fathers name and the estate is selling the property to distribute the funds.

Does the estate have a CGT allowance to offset this, and what will the tax rate be?

Many thanks,

bobster2

When did your father die? And will the sale be completing in the 2025/26 tax year?

https://www.gov.uk/guidance/capital-gains-tax-rates-and-allowances

Dilbert_Investor

Thanks.  Last summer, but the sale wont be until this tax year.

Keep_pedalling

The estate gets an allowance of £3,000 and you can deduct selling costs. The rate if 24%.

How did you value the house for the IHT return? As the estate was in IHT territory it is possible HMRC will demand additional IHT rather than CGT. 

Dilbert_Investor

We got a probate valuation from an estate agent, and checked with a couple of other agents who were about the same price.

We have done a lot of maintenance over the past 10 months, but don’t think we can deduct that for CGT.

Keep_pedalling

Dilbert_Investor said:

We got a probate valuation from an estate agent, and checked with a couple of other agents who were about the same price.

We have done a lot of maintenance over the past 10 months, but don’t think we can deduct that for CGT.

When an estate is close to or in IHT territory it is always best to get a paid for RICS valuation which is less likely to be challenged by HMRC. Once sold I would pay the CGT but hold back sufficient cash from distribution just in case HMRC divide you owe IHT not CGT.

You are correct, maintenance cost can’t be offset against CGT, you can deduct estate agents fees and conveyance costs.