CGT - Can I defer a property sale gain to future losses?
Options
marcusjames
Posts: 77 Forumite
in Cutting tax
For background, my father passed away last year and left some family members his home and a rental property.
The house was slightly renovated following his passing and sold (this tax year) for a gain over the probate value. Whilst I consider this would be liable for CGT, the rental property sale will undoubtedly make a loss. The estate agent has challenged the original probate value on the rental by a fairly significant amount. Long story, but the solicitor/executor arranged and submitted the valuation without our involvement. There were three valuations and the solicitor used the highest (by some 30% over the other two).
We have considered contacting HMRC to challenge the value but I suspect this will be difficult to prove. Another option would be to try to defer the gain this year (from sale of his home) and use against the inevitable loss next year once the rental sells.
Can anyone advise if this is possible. I've heard of carrying forward losses but not gains.
Thanks
The house was slightly renovated following his passing and sold (this tax year) for a gain over the probate value. Whilst I consider this would be liable for CGT, the rental property sale will undoubtedly make a loss. The estate agent has challenged the original probate value on the rental by a fairly significant amount. Long story, but the solicitor/executor arranged and submitted the valuation without our involvement. There were three valuations and the solicitor used the highest (by some 30% over the other two).
We have considered contacting HMRC to challenge the value but I suspect this will be difficult to prove. Another option would be to try to defer the gain this year (from sale of his home) and use against the inevitable loss next year once the rental sells.
Can anyone advise if this is possible. I've heard of carrying forward losses but not gains.
Thanks
0
Comments
-
Not possible. Only option is to sell rental this tax year then you could off-set losses.0
-
No, you can't carry forward gains. What you need to do is to sell both in the same tax year, so the loss can be set against the gain, or sell the loss making one first and then you can carry forward the loss against the later gain.
Although, better still is to get the probate values changed for both to be closer to the real market value.0 -
That's normally nothing to worry about. Professionals do it all the time when no IHT is payable by the estate. HMRC in the form of the IHT office will only be interested in ensuring that the property has not been undervalued.marcusjames wrote: »the solicitor/executor arranged and submitted the valuation without our involvement. There were three valuations and the solicitor used the highest (by some 30% over the other two).
Thanks
However HMRC, as an Income Tax and CGT office, will be interested in ensuring that the property has not been overvalued in respect of your acquisition value for CGT purposes.
You should therefore use a more realistic value.
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg32210
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg32222
I'm afraid you probably won't have a loss when the computation is done using the correct value./0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards