CGT on family home

cgphillips8

Hi All,

About 20 years ago my mother who had split with my dad died and left half the family home to me and my sister with my dad remaining in the house.

Around 10 years ago he died leaving the house to me and my sister.

We decided to rent the house out to the same couple until we decided to sell the house.

Sale completion was end of March.

I know there is CGT to pay but my question is?

Is the tax the price difference between when we inherited the house and the sale price?

Also does the fact that I and my sister owned half the house for the 10 years before the death of my dad have any affect on cgt?

Rgds

Cgp8

Keep_pedalling

When your mother left her half to you and your sibling did her will state that your father could remain living there? If it did then it would have created a trust and you would not have inherited that half until his death in which case CGT will be based on the probate valuation of the whole house at the time of his death.

On the other hand if she left it to you absolutely then 50% of the gain will be based on the 50% of the increase since her death and the other 50% on the gain in value of your father’s share since his death.

poseidon1

https://forums.moneysavingexpert.com/discussion/6667789/cgt-on-family-home

You say mother had split from your father, was this via a formalised divorce so that on her death she was not legally married to your father?

Even if they were no longer married and as intimated by @Keep_pedalling, had she left her half subject to your father having a formal right to occupy that half for life?

The answer to this question will determine whether you have two separate CGT valuation points ( the date of each parents death) or a single valuation point as at your father's date of death.

Just as a side observation you are asking this question quite late in the day, given you only have 60 days from completion to submit the separate CGT returns and each of you pay the resulting tax.

You may therefore benefit from seeking the services of a chartered accountant to prepare the computations (once you produce the valuations ) and calculate the tax you both owe. Their charge is tax deductible against the taxable gain.

Also bear in mind you also have to submit a formal self assessment tax return for 2025/26 reporting the same gains for HMRC's closer examination. However, I assume you both have been submitting tax returns in any event for your past rental income.