CGT - reporting house sale

SacredStephan

We sold a house last year which was owned by my late father-in-law. The sale completed in July and no CGT was due, all the gain was covered by Private Residence Relief. I don't recall notifying HMRC or filling in a form after completion. Should I have done this? Should I notify them now? We are UK residents and the house was in the UK.

eskbanker

SacredStephan said:

We sold a house last year which was owned by my late father-in-law.

Was the property sold as part of the process of administering his estate?

SacredStephan said:

all the gain was covered by Private Residence Relief

Surely if PRR was 100%, he must have lived there permanently and therefore CGT wouldn't come into the equation at all?

SacredStephan

Yes, the house was sold as part of the process of administering his estate. He lived there permanently but spent his last 15 months in a care home. The house is in England.

poseidon1

SacredStephan said:

We sold a house last year which was owned by my late father-in-law. The sale completed in July and no CGT was due, all the gain was covered by Private Residence Relief. I don't recall notifying HMRC or filling in a form after completion. Should I have done this? Should I notify them now? We are UK residents and the house was in the UK.

From a previous post, your FIL died in or around September 2023, so this was presumeably a probate sale of the property last year.

Can't see on what basis PPR would be in point for an executor's probate sale. However, was there even an estate gain to worry about between death in September 2023 ( probate value) and July 2024 sale proceeds?

If there was a gain and it exceeded £3,000 ( estate CGT exemption) then there certainly appears tax should have been paid, unless the tax was within the annual £500 de minimis tax threshold for deceased estates.

Any tax outstanding from 60 days after sale will have interest accruing thereon, and HMRC may ( in their discretion ) impose penalties for late reporting.

If there was a probate gain with tax to pay, then disclosure to HMRC required ASAP. 

Since you appear to be wholly unfamiliar with estate tax compliance, maybe sensible to enlist the services of a Chartered Accountant to assist you, since there is also a requirement to submit a 2024/25 estate tax return (form SA900) to report the same gain for formal review by HMRC ( they might have an issue with the September 2023 probate valuation).

Estate tax compliance can be quite complex unfortunately.

SacredStephan

poseidon1 said:

Can't see on what basis PPR would be in point for an executor's probate sale. However, was there even an estate gain to worry about between death in September 2023 ( probate value) and July 2024 sale proceeds?

Perhaps I used the wrong terminology. There was no gain between date of death and the actual sale date.

poseidon1

SacredStephan said:

poseidon1 said:

Can't see on what basis PPR would be in point for an executor's probate sale. However, was there even an estate gain to worry about between death in September 2023 ( probate value) and July 2024 sale proceeds?

Perhaps I used the wrong terminology. There was no gain between date of death and the actual sale date.

Yes correct terminology would have been a time saver. 

Sounds like you made an estate loss then?

Nothing to report to HMRC unless you made a gain on selling any other estate assets, in which case you will want to report the property loss in order to offset it against gains made elsewhere.

Are you aware of the informal tax reporting process if there are any taxes due prior to finalising the estate administration?

Keep_pedalling

SacredStephan said:

poseidon1 said:

Can't see on what basis PPR would be in point for an executor's probate sale. However, was there even an estate gain to worry about between death in September 2023 ( probate value) and July 2024 sale proceeds?

Perhaps I used the wrong terminology. There was no gain between date of death and the actual sale date.

In which case there is no CGT. PPR is only relevant for a someone living selling a home, death wipes out CGT regardless if the property was their home or somewhere they never lived.