CGT on inherited property

[60mins]

DB and me inherited DMs house years ago. (It has been empty some of the time, more recently rented. How to work out much CGT would we owe if we sold it…? I mention renting it as I’m not sure if that impacts the tax?) One basic, one higher rate tax payer…

Sale value

Less: Value of property at date of death (probate value)
Agent fees to sell
Legal fees to sell
Any capital expenditure on the property (enhancements- such as extensions)

That gives you your gain. If owned in joint names, you each need to report half the gain.

Take off your annual exemption if not used elsewhere, which is £6,150 from 6 April 2023.

That gives you your taxable gain. Any amount which falls within your available basic rate band (after income) is taxed at 18%. Anything about that at 28%.

Should caveat that what I've listed as what can be deducted isn't exhaustive, just gave the main examples.

Renting it out used to affect the tax but it doesn't anymore unless you are living in the property with a lodger.

Tax could be reduced if you have lived in the property at any point as your main residence (principal private residence relief).

Cheers!

This year the CGT allowance is £12,300 for individuals and 50% of that figure for trusts. Next year CGT allowance is £6,000 and the following year it reduces to £3,000 for individuals.

You should probably move into it for a year (making it your own home to get PPR ) before selling it.

Is this still possible? My information was somewhat outdated, I am unsure if this would still be applicable.

www.propertyhawk.co.uk/magazines/hmrc-target-landlords/