Capital gains tax

[Coffeelover98]

I have never really thought about Capital gains tax. However my grandma has recently passed away and it has been decided that we sell her property. She and my late grandad bought it over 60 years ago. The more I try to understand about CGT the more unfair it seems why should we be taxed on something my grandparents worked hard for and wanted to pass on.

If the deeds are I. Grandparents' names there's no CGT

You’re whining for nothing op
For example, say the house was worth 400k when you inherited it
And its now worth 450k when you sell
You only pay CGT on the 50k
So you pocket 400k plus the remainder of the 50k after tax
Question- how on earth is that unfair? And how does it have any impact on your grandparents “hard work”!

My DD will probably pay IHT, but she will get around around 500k tax free and pay 40% on the reminder, not a bad days work

Funny the rich place their in trust and avoid both taxes.

ok so I have got this completely wrong I thought I was going to be due on the price they paid when the bought the property failed to understand it would be on from the value when I inherited it. That makes more sense.

still don’t agree with IHT not that was ever due on their estate but the principal seems wrong.

But it wasn't your money that was spent, was it? The government is taxing you making a profit on selling a property which you got for free. Your grandparents spent money for upkeep because they wanted to live in a nice house, which they did.
In your position, it would make more sense to be aggrieved about the "working people" paying taxes on their earnings.

My grandparents, parents never inherited anything, I may from mine, which makes me luckier than them. I will pay taxes due.

My kids will inherited a LOT. They will also pay taxes dies but again that makes them incredibly lucky, to inherit money that will look after them j to old age, their children in turn one day too… I hope they don’t whine about their luck of birth.

It's £325k per person, not £1m. Potentially £650k if inheriting from both grandparents.

@GRex plus £175k from each grandparent if the estate includes a residence being passed to direct descendants. That's how people get to £1m.

Oh get over yourself Op 😬

Its not that straight forward... deliberate deprivation of assets can still mean tax is paid, even after the 7 years.
& if you carry on living in the house rent free, that has tax implications too.

My friends df was a builder.
She was always moving house so they didn't pay cgt as the 2nd property became the main residence.
You could sell your primary residence op.

No that’s not true. It’s 325k pp raised to 500k pp if the property is going to children or grandchildren. The allowance is doubled to 1m if your grandparents were married. I irks me that people post on here without knowing the facts

You inherited a house tax free, and it became your second house, and you are complaining about paying tax on the gain from when you inherited it? That can't even be that much as a % of the total selling price if your grandmother only recently passed away.

That’s correct. CGT would be payable on the difference between the value of the property when you inherit it, and the price you sell it for (assuming it doesn’t become your main property).

The price your grandparents paid is completely irrelevant.

I know where you're coming from OP, I think people are being a bit mean here. It's fine (and fucking normal) to feel a bit miffed when you're taxed eye watering amounts left right and centre when a loved one dies. Especially IHT.

Yes, this. If the property was say worth 500k at the point that you inherited it, and you sell it later for 550k, there would only be CGT due on the 50k - but def only on the uplift in value since the moment your name was placed on the title deeds.

On this basis, I actually don’t think this such a big deal as, when you sell it presumably, you’d have £550k-9k = 541k you (if you are a basic rate tax payer) that you didn’t have before your GP died?

Not a labour voter btw, but I think this is one of the fairer changes.

You're only taxed "eye watering amounts" if you've had an eye watering amount land in your lap. I'm perfectly happy with IHT and my parents' estate will pay a lot. That just makes me very fortunate IMO.

Your grandparents worked hard for the £17k or whatever they paid for the property.

They didn't work hard for the the extra £100k or whatever it was they made through inflation.

You didn't work hard for the £117k you inherited.

You didn't work hard for the extra £4 or £5k it's accrued since you inherited it.

Stop being a tight bastard and pay your taxes.

So you’ll pay tax on the price you sell it for, less what you inherited it for, less any costs incurred in selling it less your annual allowance.

So if you inherited it for 300k say, sold it for 350k, you’d pay tax on a maximum of 50k. At either 18% or 24%. So the maximum capital gains tax due in this example would be 12k. I don’t think that’s too bad for selling something worth 350k that you have not worked for in any way The other 335k plus is in your pocket!!

(and if it hasn’t gone up much since you inherited it then there won’t be as much CGT to pay)

The more I try to understand about CGT the more unfair it seems why should we be taxed on something my grandparents worked hard for and wanted to pass on.

Maybe try harder to understand, as you appear to really not understand it?

The CGT is on the increase in value since you received it; and is because you already own a property. The money your grandparents put in to it, is not subject to CGT. The gain that you have made, is. Your grandparents have passed on what they worked for.

If its really the tax you object to and think is unfair (I disagree btw) donate it to charity, that way no tax will be paid :)
If you're just being a greedy fucker who thinks other people should work hard, spreading their money thinly to pay taxes to fund the public services so that you can get a massive free windfall tax free well, no sympathy.

How is benefiting from property inflation and inheritance or unearned income in any way morally exempt from the taxation that keeps our country's services going?

Capital Gains Tax is only charged on the Gain, ie the extra free money you have gained by doing nothing. In your case that will be the difference between the value on the date of death and the price you sell it for. If we didn’t have CGT people who make their money from shares and property wouldn’t have to pay any tax.

If you don't agree with IHT OP (fair enough, plenty don't) how much extra income tax are you happy to pay to that the richest 4% in the country can get massive tax free windfalls they've done nothing to earn ?

I would keep it and do it up and rent it out to get an income rather than selling it and paying CGT 👍🏼

I still don’t think you’ve understood it correctly OP
I recommend you see a financial adviser to explain it to you.