Capital Gains Tax on Inherited Property (Spouse)
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sm1ffy6
Posts: 7 Forumite
Hi there
I am currently helping my mother complete probate for my late father.
I have two brothers, we are considering completing a deed of variation to leave my Dad's estate in full to my mother.
My father had 1 property solely in his name, and also had half a property with my Mother who has the other half.
My question is if my mother ended up with both properties in her name would she have to pay any additional tax or capital gains tax, my uncle is currently living in one of the properties as my father was looking after him (no rent).
The other option we were considering is a deed of variation so everything goes to my mother but one of the propertys goes to one of my brother's(who doesnt have a property), as 2 of us already have a property, would this be an option or better option? My mother's property is mortgage free and she has asked if this would be a viable option if all parties were to agree
Any help/info would be appreciated.
I am currently helping my mother complete probate for my late father.
I have two brothers, we are considering completing a deed of variation to leave my Dad's estate in full to my mother.
My father had 1 property solely in his name, and also had half a property with my Mother who has the other half.
My question is if my mother ended up with both properties in her name would she have to pay any additional tax or capital gains tax, my uncle is currently living in one of the properties as my father was looking after him (no rent).
The other option we were considering is a deed of variation so everything goes to my mother but one of the propertys goes to one of my brother's(who doesnt have a property), as 2 of us already have a property, would this be an option or better option? My mother's property is mortgage free and she has asked if this would be a viable option if all parties were to agree
Any help/info would be appreciated.
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Comments
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You need to consider carefully the transferable nil rate band.
It may be better for your mum to inherit everything and gift the house to your brother.
No IHT or CGT. Full available transferable nil rate band and 7 years the value drops from her estate.
If he gets it from your fathers estate is uses up nil rate band.0 -
You all need to get paid for professional advice from an IHT specialist. Probably a solicitor who is a STEP member would be best. You also all need to se tath you wills are up to date and will reflect the new circumstances of each individual.Hi there
I am currently helping my mother complete probate for my late father.
I have two brothers, we are considering completing a deed of variation to leave my Dad's estate in full to my mother.
My father had 1 property solely in his name, and also had half a property with my Mother who has the other half.
My question is if my mother ended up with both properties in her name would she have to pay any additional tax or capital gains tax, my uncle is currently living in one of the properties as my father was looking after him (no rent).
The other option we were considering is a deed of variation so everything goes to my mother but one of the propertys goes to one of my brother's(who doesnt have a property), as 2 of us already have a property, would this be an option or better option? My mother's property is mortgage free and she has asked if this would be a viable option if all parties were to agree
Any help/info would be appreciated.0 -
CGT would not be payable on any of the inherited property if it was sold today. If the part property she currently owns is not her primary residence then it could be payable on that if the profit exceeded her annual allowance.
Which property does she live in and what would the value of her estate be if she inherited everything?0 -
Hi there
She owns half of the one she lives in and the other one my dad owned wholly on his own.
If she inherited everything including the two houses I would say her estate would be worth approx 950k
Thanks0 -
Hi there
She owns half of the one she lives in and the other one my dad owned wholly on his own.
If she inherited everything including the two houses I would say her estate would be worth approx 950k
Thanks
OK then CGT is currently a non issue and would only effect her if she sold the other house and the value of it increases substantially between now and the date of sale.
The combination of NRB and residence NRB means £900k of her estate would be exempt, rising to £950k in April and £1M the following April, so IHT is probably not going to be an issue either,0 -
Probably correct but it does not alter the need for all parties to get professional advice.Keep_pedalling wrote: »OK then CGT is currently a non issue and would only effect her if she sold the other house and the value of it increases substantially between now and the date of sale.
The combination of NRB and residence NRB means £900k of her estate would be exempt, rising to £950k in April and £1M the following April, so IHT is probably not going to be an issue either,0 -
Yorkshireman99 wrote: »Probably correct but it does not alter the need for all parties to get professional advice.
I would not disagree with that. If there is a significant amount of that £950k in more liquid assets then consulting an IFA might be a wise move.0 -
I would not use an IFA if there is any need to use trusts. Sdaly many IFA's are not sufficiantly skilled in that area.Keep_pedalling wrote: »I would not disagree with that. If there is a significant amount of that £950k in more liquid assets then consulting an IFA might be a wise move.0 -
950k with 2 properties could easily go over 1m in a few years.
How much is the give away one worth?
With 1m nil rate to play with and only one property there should be more headroom.0
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