how much capital gains tax will I pay?

[happymundanes]

I am selling the house I grew up in. It was left to my sister and me on the death of my parents. They bought it for about 900k and it is now worth 1.325. It has been rented out for the past 6 years since we left home. how do I work out how much capital gains we will pay? There is no mortgage.

Thanks very much in advance.

This site also talks about using your yearly tax free allowance for 3 years to offset the gains

"Selling or disposing of assets you've inherited
When you sell or dispose of an inherited asset, you may be liable to Capital Gains Tax on any profit or gain you make.

You'll need to get a valuation of the asset at the date of death. Use this value as the cost of your asset to work out your gain or loss. If the value has been agreed for Inheritance Tax purposes you should use the same valuation. "

It sounds like you should get some advice from an accountant, as there is a lot at stake.

link www.hmrc.gov.uk/cgt/intro/gifts-inherit-divorce.htm#2

Thanks herroyal.

When your parents died, the house will have been valued for probate and Inheritance tax paid on the estate.
Your parents will have paid tax on the rental income. It does not affect you.

THe probate value is YOUR cost.
Ignore what your parents paid.
So if it was valued at £1.2 million at probate
and is worth £1.3 million now, your gain is £100k between you
so £50k each
you get a £10k allowance each per year and pay CGT at 28% on the rest

Thanks talkin that's so helpful. What if I moved back into the property for 6 months, would I be able to deduct anything. I own 1 other property but it needs renovating.

If the house became your primary residence and you bought your sister out then you could sell it tax free
BUT
as its worth a LOT, HMRC will want proof that these are genuine transactions, not just to avoid tax

I think there is also a minimum residence period .... will need to check

Thanks talkin, I can't buy out my sister because she will not consent to me mortgaging the house (she wants to sell).

There's no minimum residence period but you do have to be able to prove that the house is genuinely your main residence during that time. That means your post goes to the address, you're on electoral roll from that address etc. also, if HMRC questions the transaction they will ask about your motive for moving in. So living there for 6 months while your rebuilding your previous main residence and then moving back to your main residence - probably not acceptable as your presence at the property was only ever intended to be temporary. On the other hand - say your current house is smaller than the second property. You meet someone with children and want to live with him so move into the bigger property. You intend to do up the smaller one and sell it. The relationship fails, you don't need the bigger property so move into the (now done up) smaller property and sell the bigger one. Probably acceptable as there was an intention to permanently occupy the bigger property but the circumstances changed.

I hope that makes sense.

Thanks so much riksti, that's incredibly helpful!