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Capital Gains Tax
davea55
Posts: 2 Newbie
Hi
I have a question on Capital Gains Tax that I hope somebody can help me with. I have recently been diagnosed with terminal cancer, so, while I am still trying to get my head around the diagnosis, I am trying to ‘get my affairs in order’ while I am still fit enough to do so.
I have a straightforward will (no trusts or other complications) and am leaving everything to my wife. Part of the estate includes a flat that I used to live in during the week when I worked in London and which is currently rented out. It is owned in joint names. My understanding is that any CGT liabilities die with you, so my wife will inherit my share at probate value and will not have to pay any CGT or IHT at that point.
Am I right in thinking that when she does come to sell the flat she will then only have to pay CGT on her half (using the normal CGT calculations) plus any increase in value since my death?
Davea
I have a question on Capital Gains Tax that I hope somebody can help me with. I have recently been diagnosed with terminal cancer, so, while I am still trying to get my head around the diagnosis, I am trying to ‘get my affairs in order’ while I am still fit enough to do so.
I have a straightforward will (no trusts or other complications) and am leaving everything to my wife. Part of the estate includes a flat that I used to live in during the week when I worked in London and which is currently rented out. It is owned in joint names. My understanding is that any CGT liabilities die with you, so my wife will inherit my share at probate value and will not have to pay any CGT or IHT at that point.
Am I right in thinking that when she does come to sell the flat she will then only have to pay CGT on her half (using the normal CGT calculations) plus any increase in value since my death?
Davea
0
Comments
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It is owned in joint names.
As joint tenants or as tenants in common? Has the property been owned in the same way since purchase?0 -
I have a straightforward will (no trusts or other complications) and am leaving everything to my wife. Part of the estate includes a flat that I used to live in during the week when I worked in London and which is currently rented out. It is owned in joint names. My understanding is that any CGT liabilities die with you, so my wife will inherit my share at probate value and will not have to pay any CGT or IHT at that point.
CGT yes, IHT yes but for a different reason. No IHT will be payable because you are leaving everything to your wife and the spousal exemption applies.
She will pay CGT on the whole proceeds, and the base cost for the CGT calculation will be [value of your half as at date of death] + [purchase cost of her half].Am I right in thinking that when she does come to sell the flat she will then only have to pay CGT on her half (using the normal CGT calculations) plus any increase in value since my death?
"CGT is extinguished on death" means that the base cost on the inherited half is the value at date of death, not the amount the deceased paid for it.0 -
Malthusian
Many thanks for your clear response, this is very helpful.
Davea0
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