Capital gains tax questions.

[Rollerbird]

Working this out for my mother in law
Second home
Bought with husband origimally
Sold a couple of years after he passed away.
Is it just the difference between value at probate and selling price?
Or is the original purchase price involved too?
Does anyone have a formula I can use please?
I have all Income figures etc

Did the own the property as joint tenants or tenants in common?

Purchase price would definitely be involved either on your MIL's share or the whole property. depending on answer to Titus' question above.

HMRC has a calculator you can use:

www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/disposal-date

You possibly might have to do 2 calculations depending on how the property was owned (ie one for your MIL's share and one for the share she inherited if they were tenants in common).

PS - I am not a tax adviser, so may be very wrong, but I had to do something similar years ago and this is how it worked, if I remember correctly. It might be worth paying an accountant to do this for you!

Joint tenants

@pinkearedcow that is interesting.
Have been through the gov capital gains calculation this morning but can't see where to input about having bought it together and taking into account her inheriting at x value, then the selling price.

[quote Rollerbird]@pinkearedcow that is interesting.
Have been through the gov capital gains calculation this morning but can't see where to input about having bought it together and taking into account her inheriting at x value, then the selling price.[/quote]
I think that's why you might need to do two separate calculations, but tbh my memory is very hazy on it all and I am not sure I am right , you need to get proper advice - maybe ring HMRC?

There's so many variables you need proper advice - when it was bought / did they live in it / rent it out / do improvements/ what's her income now / what did they make in rent etc etc

If they had have been tenants in common then you would have had to do two calculations to get a cost, the HMRC calculator is just for basic sales unfortunately.

Sorry cross posted with Titus who seems to know what they are talking about!

@idontlikealdi - is right, (except about Aldi which is great!) I have simplified it and there are many more variables at play.

I have assumed that your PIL had a main residence elsewhere the whole time they owned it.

@pinkearedcow Ha, I wouldn’t count on it, it’s been a while

Thanks. I'm assuming they were joint joint owners because that's sort of standard for old married couples? Need to try and find out. But unsure now the property is sold how to do that.

Not necessarily Rollerbird unfortunately, the land registry will tell you on the title deeds. It costs £3 I think.

Also to add further complication, if the property was bought before 1982, the purchase price will be replaced with the market value of the asset in March 1982. If it was bought after this it will just be the purchase price. www.ricsfirms.com/glossary/1982-market-values-for-residential-and-commercial-property/

OP, I would suggest that your MIL pays someone to do this honestly and sharpish. You have 30 days to inform HMRC of CGT due on a residential property.

Was just going to mention the 30 days. That almost caught me out this year as new. But it still has to go on next tax return is my understanding

It was bought in 1993.
I will check land registry thanks

Her base cost is half the original cost plus half the probate value. For example, if the original cost was £100K and the probate value is £300K, the cost to use in the calculation is £50K plus £150K = £200K.