Inherited house, renovation , selling current home, tax etc.

jp2026

Would really welcome any thoughts on our situation.

Have inherited house with sibling from parents. Probate granted last August. No IHT. Divided up other monies but have not done anything with the house as was overwhelmed at the time and we weren't sure what we wanted to do and the house had lots of stuff to clear. Fog is lifting now and we need to make decisions. I am currently linked to the house with the council and have received a bill for council tax which includes second home charge. Was in a bit of a panic about this but not sure I can do anything about it.
The house needs extensive restoration including a rewire and had a flood too downstairs.
I am considering renovating and then moving in but am concerned about costs and tax implications etc. Own a home in same area, want to start the work asap if we decide to do this but continue to live in current house and then put on the market. Am I then going to be liable for stamp duty? second home costs? CGT?
Will need to buy out my sibling also. Is the best thing to do to transfer in my name only and buy them out? Will it then be classed as a second home? Is there any dispensation whilst work is carried out to make it habitable? Should my house be on the market?
Sorry if this is a lot of questions, just we have avoided for so long but now need to resolve and I don't know where to start! Neither us thought we would be in this situation so it is all still a bit of a shock!
Just don't want to make a wrong move.
Happy to answer further questions.

Keep_pedalling

The danger here is you put a lite of time and money into this and not get it back. Personally I would sell as it is and not go through all that hassle. 

Flugelhorn

honestly better to put the house on the market as it is and then settle up with sibling. I think you can get 2nd home council tax exemption if property is on the market 

jp2026

Oh crikey! Thanks for the comments, I totally get your point. I know it’s a big undertaking and I have run away from it up until now but I would like to see what the options could be for me if i did choose to do it if anyone could help?  

RAS

If you remain resident in your existing house or sell until you move into your parent's old home, there is no CGT liability.

But,
do you have the money knocking around to do the renovations before you sell the old one?
Is your sibling prepared to wait (a defined time) until they get their half of the value?
You will have to pay second or empty property CT. 

jp2026

Thank you for all the comments, they are really helping to clarify my thoughts. Keep them coming!
Thank you for clarifying the CGT, does that apply to stamp duty too?
I have the money for the renovations before selling.
Will need to discuss with sibling.
Thank you for clarification on the CT.

Marcon

jp2026 said:

Would really welcome any thoughts on our situation.

Have inherited house with sibling from parents. Probate granted last August. No IHT. Divided up other monies but have not done anything with the house as was overwhelmed at the time and we weren't sure what we wanted to do and the house had lots of stuff to clear. Fog is lifting now and we need to make decisions. I am currently linked to the house with the council and have received a bill for council tax which includes second home charge. Was in a bit of a panic about this but not sure I can do anything about it.
The house needs extensive restoration including a rewire and had a flood too downstairs.
I am considering renovating and then moving in but am concerned about costs and tax implications etc. Own a home in same area, want to start the work asap if we decide to do this but continue to live in current house and then put on the market. Am I then going to be liable for stamp duty? second home costs? CGT?
Will need to buy out my sibling also. Is the best thing to do to transfer in my name only and buy them out? Will it then be classed as a second home? Is there any dispensation whilst work is carried out to make it habitable? Should my house be on the market?
Sorry if this is a lot of questions, just we have avoided for so long but now need to resolve and I don't know where to start! Neither us thought we would be in this situation so it is all still a bit of a shock!
Just don't want to make a wrong move.
Happy to answer further questions.

How practical are you - any experience of renovating a house in a very poor state of repair? How much can you do yourself and how much will you have to depend on third parties (especially an electrician if it needs a rewire)? Have you got any costs for how much you need to have by way of ready cash to pay for all this?

Talk to your local council about any possible dispensations - it varies by area, so you need to talk to them. Asking here isn't going to guarantee an accurate answer!

If probate was granted 10 months ago, 'it is all still a bit of a shock', and you've done nothing much, are you sure you really have the heart (and the cash) to embark on what could turn out to be anything but the dream home you might be envisaging? What could you buy if you sold your own property, and half the profits from selling the inherited property? Is your sibling happy to wait for an indefinite period...etc.

jp2026

Marcon said:

jp2026 said:

Would really welcome any thoughts on our situation.

Have inherited house with sibling from parents. Probate granted last August. No IHT. Divided up other monies but have not done anything with the house as was overwhelmed at the time and we weren't sure what we wanted to do and the house had lots of stuff to clear. Fog is lifting now and we need to make decisions. I am currently linked to the house with the council and have received a bill for council tax which includes second home charge. Was in a bit of a panic about this but not sure I can do anything about it.
The house needs extensive restoration including a rewire and had a flood too downstairs.
I am considering renovating and then moving in but am concerned about costs and tax implications etc. Own a home in same area, want to start the work asap if we decide to do this but continue to live in current house and then put on the market. Am I then going to be liable for stamp duty? second home costs? CGT?
Will need to buy out my sibling also. Is the best thing to do to transfer in my name only and buy them out? Will it then be classed as a second home? Is there any dispensation whilst work is carried out to make it habitable? Should my house be on the market?
Sorry if this is a lot of questions, just we have avoided for so long but now need to resolve and I don't know where to start! Neither us thought we would be in this situation so it is all still a bit of a shock!
Just don't want to make a wrong move.
Happy to answer further questions.

How practical are you - any experience of renovating a house in a very poor state of repair? How much can you do yourself and how much will you have to depend on third parties (especially an electrician if it needs a rewire)? Have you got any costs for how much you need to have by way of ready cash to pay for all this?

Talk to your local council about any possible dispensations - it varies by area, so you need to talk to them. Asking here isn't going to guarantee an accurate answer!

If probate was granted 10 months ago, 'it is all still a bit of a shock', and you've done nothing much, are you sure you really have the heart (and the cash) to embark on what could turn out to be anything but the dream home you might be envisaging? What could you buy if you sold your own property, and half the profits from selling the inherited property? Is your sibling happy to wait for an indefinite period...etc.

Thank you, really helpful comments and questions. All helping me focus.
Not practical but have started to get quotes and have got some ready cash to pay.
Thank you for the advice on local council.
In terms of timing I think I know that a decision needs to be made soon as the house shouldn't do another Winter empty in my opinion.
I have thought about buying with my half and the proceeds of current house but there isn't much available in the area and the inherited house has real  potential.
Need to discuss with sibling about waiting etc, could potentially give him some of the money upfront.

madbadrob

jp2026 said:

Would really welcome any thoughts on our situation.

Have inherited house with sibling from parents. Probate granted last August. No IHT. Divided up other monies but have not done anything with the house as was overwhelmed at the time and we weren't sure what we wanted to do and the house had lots of stuff to clear. Fog is lifting now and we need to make decisions. I am currently linked to the house with the council and have received a bill for council tax which includes second home charge. Was in a bit of a panic about this but not sure I can do anything about it.
The house needs extensive restoration including a rewire and had a flood too downstairs.
I am considering renovating and then moving in but am concerned about costs and tax implications etc. Own a home in same area, want to start the work asap if we decide to do this but continue to live in current house and then put on the market. Am I then going to be liable for stamp duty? second home costs? CGT?
Will need to buy out my sibling also. Is the best thing to do to transfer in my name only and buy them out? Will it then be classed as a second home? Is there any dispensation whilst work is carried out to make it habitable? Should my house be on the market?
Sorry if this is a lot of questions, just we have avoided for so long but now need to resolve and I don't know where to start! Neither us thought we would be in this situation so it is all still a bit of a shock!
Just don't want to make a wrong move.
Happy to answer further questions.

Having read your replies to the answers given I think deep down you are not yet ready to embark on this adventure because the answers are all what someone without the grief and sentimentality would have come up with automatically.  That said I also think deep  down no matter what we say here you are going to renovate this property and keep it in the family so all in all it will be down to whether the sibling will wait.

As its not been mentioned already if you cant afford to rernovate totally without the sale of your current home you could buy a caravan pitch in in the garden of the house being renovated which would then release the funds needed and of course the siblings share.  This would allow the immediate work needed which could allow you then to get into the house in say 2 rooms whilst you finish the others.  

Now I am not a tax expert by a long shot but if you was to sell the house you currently live in first you would pay stamp duty at the proscribed levels see https://www.gov.uk/stamp-duty-land-tax/residential-property-rates.  The only question i have here is would the figure be based on the total price say for example 250k or 125k as is your share to pay sibling or a third thought as it is a gift from a deceased parent is there any taxes at all to pay?  Thats one for KP RAS etc to answer