How long can you kero a house after inheritance?

[mikado1]

I'm wondering about tax implications. Myself and siblings have inherited our family home and are struggling to decide what to do. Can we just let it sit for a year or so or will that mean CGT or other? One of us may buy it but undecided as yet. The property value itself will not put us into inheritance tax.

If it goes up in value while it is in your names then you will need to pay capital gains tax on the profit

Does this article help?

https://www.crane-staples.co.uk/news/do-i-pay-capital-gains-tax-on-inherited-property/

Ok thank you both. If only if it goes up and only then on the profit, that wouldn't be too bad and would be worth holding on to get the decision right. I'll read the article now.

That's really helpful and makes me feel we're not under the pressure I thought we might be. I wonder does that stand if one of us buys and pays the others at probate value.

The house is an asset of the estate and I would expect the Executors or Administrators to be under an obligation to get market value. Probate values tend to the pessimistic.

It will depend. Has the house been transferred to you all yet? Or is it in the executry still?

Remember that it's the Estate that pays any taxes (CGT, IT etc), whatever is left goes to the beneficiaries as per the will. One of you can buy it, but they need to pay cash or use a mortgage, then the estate can be distributed.

In the executrix still. We're holding things up really as we are so unsure about what to do and what to do about valuation, we've been given a value with a 100k range (eg 500-600k)

You should use the high value unless that takes the estate over the IHT threshold. CGT will be due if the property sells for more than the valuation given for probate.

I'm going through this. There should be no council tax or utilities duty which you are waiting for grant if probate so essentially no running costs just now.

That's a vague value and usually the probate registry want a more precise value. I would just ask a local estate agent to come over. I got a sale and a lettings value whilst I was trying to decide what to do.

Cgt is paid on the increase (if any) between the probate valuation and what the house is then sold for. How much cgt depends on what income tax bracket you are in.

We were left a family home ( between 3) fortunately it was in the Lake District so we decided to keep it and used it as a holiday home for many years. We had to do some work on it and as the children grew up we were using it less so decided to sell it.
The capital gains was only paid on the increase in value. Fortunately we sold before the reduction in the CGT allowance.
If one of your siblings buys out the rest then stamp duty will be involved along with solicitors fees.
CGT doesn’t kick in until 12mnths after the property is transferred ( I think). And to be fare it may be negative value if house prices tank over the next few years.
Remember the probate value is irrelevant since the house is only worth what someone will pay when it is sold. Try not to think of it as a set figure. Any money you receive is extra regardless of CGT.

Thank you all for this valuable advice. The estate agent is happy to give a valuation anywhere along that range and is deferring a little to us on whether we want to go high or low end. It would bring us over IT if we went high, just about. Lots to consider. Lovely to keep it as holiday home but I don't think the others would go for that.

If one of you buys the other out at probate value there is no "gain" to the person selling as the gain is calculated by deducting the probate value from the actual value sold at.

No CGT in this scenario.

Just keep it in mind that CGT is just payable on the profit when the property is sold and that the profit is calculated by deducting the probate value from the sales price. You can deduct other costs from this profit too, such as estate agent's fees and legal fees.

The closer the property is sold to probate being granted, the less likely a "profit" will arise.

Bear in mind if you do sell it, the sale will need to be reported to HMRC within 60 days, whether there is tax to pay or not:

Just remember it needs empty house insurance, which has fairly strict conditions and after the 6 month council tax leeway, it needs paying and usually doubles after 2 years. Plus standing charges on utilities. It’s not cheap to keep an empty house going properly,
don’t be tempted to turn off the water etc. A house gets damp very quickly when cold.

Good advice, thank you. Ins company says all OK until next renewal date.