Capital Gains Tax after selling an inherited property

RnK136

I am acting as lead executor selling our parents property and the property is left to myself and my brother in equal shares.

As I was the one who got Probate (with him as Power Reserved), the proceeds of the sale will come to me then I distribute his half to him.

Probate value was £370,000 but we have only achieved £355,000 from a buyer.

1. this means no CGT payable? but is there still a declaration needed for this after the sale completes?
2. my brother thinks that me receiving all the sale proceeds and then distributing his share of the monies to him will mean tax for me (on all of the money) and then tax for him on receiving his share - but that's not true, is it?

Keep_pedalling

No, the estate has no CGT liability on the house sale and there is no tax for him or you to pay either. 

You don’t need to report the estate loss either, although it can be used to offset any gains you have with other assets. 

poseidon1

Keep_pedalling said:

No, the estate has no CGT liability on the house sale and there is no tax for him or you to pay either. 

You don’t need to report the estate loss either, although it can be used to offset any gains you have with other assets. 

Agree there is no CGT liability and there is an overall loss. Loss will be greater than £15k in respect of attributable direct costs of selling the property ( ie net proceeds of sale at completion)

However I see from past posts, 50% of the house was in a life interest trust for father  (created under deceased mother's  will ) that terminated on his death.

Therefore the property loss was 50% attributable to the deceased father's personal estate (available to offset against any estate gains in the year).

The other 50%  loss directly attributed to each of the OP and sibling  in their personal capacity as owners following trust termination. Should each of them wish to preserve those losses to offset against any capital gains on future personal asset sales, they may need to submit self assessment tax returns.

Whilst on the subject of tax compliance, OP appears to be  towards the end of estate/trust administration, but may need to consider income tax on any estate income arising during estate admin period to complete compliance in that area.

Therefore question to OP did estate income exceed £500 in each of £2024/25 and the current tax year? What, if any income tax compliance has been undertaken so far?

RnK136

poseidon1 said:

Keep_pedalling said:

No, the estate has no CGT liability on the house sale and there is no tax for him or you to pay either. 

You don’t need to report the estate loss either, although it can be used to offset any gains you have with other assets. 

Agree there is no CGT liability and there is an overall loss. Loss will be greater than £15k in respect of attributable direct costs of selling the property ( ie net proceeds of sale at completion)

However I see from past posts, 50% of the house was in a life interest trust for father  (created under deceased mother's  will ) that terminated on his death.

Therefore the property loss was 50% attributable to the deceased father's personal estate (available to offset against any estate gains in the year).

The other 50%  loss directly attributed to each of the OP and sibling  in their personal capacity as owners following trust termination. Should each of them wish to preserve those losses to offset against any capital gains on future personal asset sales, they may need to submit self assessment tax returns.

Whilst on the subject of tax compliance, OP appears to be  towards the end of estate/trust administration, but may need to consider income tax on any estate income arising during estate admin period to complete compliance in that area.

Therefore question to OP did estate income exceed £500 in each of £2024/25 and the current tax year? What, if any income tax compliance has been undertaken so far?

Many thanks for this.

Yes, you are right about the life interest, etc. Mum died Feb 2022, trust registered Feb 2024, Dad then died July 2024. Trust ended.

We have gained £252 from selling Dad's Stock & Shares ISA from the value at the date of death that was given for Probate.

There was nothing else that provided any gains or income.

A private pension owed us £22.60 in tax, which was refunded via cheque.