Confused about Capital Gains Tax on house sale

TamVilla80

Hi, we've been given conflicting advice so though I would ask here and it might help (or confuse me further...)
Father In Law passed in January 2023, took a while to sort his finances and get probate, house is split 50/50 between husband and his sister (agreed at £210,000, so £105,000 each)
We decided to use our savings to renovate the house and moved in last December, we then renovated our old house and finally had an offer on it last week. We paid £125,000 when we moved in back in Nov 2007 and have sold for £172,000 (having £122,000 in equity, £50,000 remaining on mortgage which we will transfer over to our new house)
Are we liable for Capital Gains Tax on the profit we have made on the old house as we've been told both yes and no. It was our main residence and has not been rented out / used for business at any point. I understand we can claim relief for the time we lived in it and the last 9 months.
Any thoughts gratefully received!

Keep_pedalling

The amount of primary residence relief you have for that house means you won’t have CGT liability on that sale.

TamVilla80

Thank you, that's what I thought. As it's an heritance of a smaller estate we shouldn't pay tax on that, or stamp duty either, is that right?

Bigphil1474

A single person has an IHT 'tax free' allowance of £325k, plus it goes up to £500k if they leave a house to children, plus there may be an additional £500k from the first parents death. So no, you wouldn't expect to pay IHT if it's just the house sale. 
You are paying the sister from the sale of your house? In terms of stamp duty it might be complicated depending when you actually 'buy' the FIL's property. Presumably that would be at the same time as you sell your primary residence so you will avoid second property SDLT? You wouldn't pay SDLT on the £105k.

TamVilla80

That's right, we are using the money from the sale of our old house to pay Sister In Law her £105,000 due. We were previously advised to leave it as the estate and do this all at the same time.
As my husband in theory owns half the new house already, does this just get put into both of our names 50/50 without any issues?

Albermarle

TamVilla80 said:

Thank you, that's what I thought. As it's an heritance of a smaller estate we shouldn't pay tax on that, or stamp duty either, is that right?

Your husband as a beneficiary would never owe tax on the inheritance. If there was any IHT to pay, then the estate would pay it.

Bigphil1474

I think you'd need to get it done by the solicitors when the sale is sorted so that you are joint tenants for the whole property (if you both agree of course), as I suspect it would be half his and half yours and his, if he is using joint money to buy the other half.