Letter from Revenue and Customs re Capital Gains Tax

[Nitgel]

I will call them tomorrow but if anyone could advise it would be good.

I sold my dad's house in May. It was valued at 440 at probate and we sold for 435, literally no profit made. I just received a letter to say I may nee to pay capital gains tax on the sale. However the letter has my name address, national insurance number but a completely different house to my dads. (though in the same town).

I didn't think I needed to let anyone else know after the sale and the conveyancer didn't say anything about CGT form etc. I am not self employed.

Any advice as these things always happen on the weekend.

no have been through the letters

no i didn't even know there was a capital gains tax. Also the wrong address on the letter is weird. I looked online and that house hasn't even been on the market. The letter is from Indv and small business compliance. I am not self employed.

why on earth would they? It's not their business to advise sellers on any potential CGT

OP - you just need to call HMRC and advise them they have the incorrect address of the house you sold.
Do you think you may have any Chargeable Capital Gains in the future? It may be worth registering the capital loss with HMRC which you can ask them about at the same time.
The capital loss will be net sale price (435 less conveyancing solicitor and estate again costs) less probate value

There are lots of scam HMRC letters going around. I wouldn't do anything with it.

If you owe Capital Gains Tax on residential property you usually have to report this within 60 days.

But you didn’t have a capital gain so this doesn’t apply.

Sounds like a muddle on their side. I would ring them up. Usually I have found them helpful at HMRC.

If you want to call, DO NOT call the number on the letter.

Have just been through the process but I knew we had to pay it. Our solicitor didn't mention it once to us as she wasn't acting on anything other than conveyancing.

It’s a scam.

i think i understand now and will call them, the letter is totally legitimate.

The number is 03002003300.

By all means call HMRC but do NOT call the number on the letter. I suspect it's a scam.

I'd check the address the letter is sent from and verify the phone number before calling but even if they're scammers just calling to ask a question won't let them empty your bank.

EDIT: Google suggests that 03002003300. is a genuine HMRC number.

If a property rises in value during the administration then it's possible for the estate to have a CGT liability. Or there may be questions around whether the probate valuation was right or the sale price was a proper deal at arm's length.

If there's been a mix up over addresses then that's where your inquiry starts.

Never had any personal involvement with Capital Taxes but I'v had a couple of issues over PAYE stuff. Apart from a long wait to be answered both were positive experiences with professional staff who wanted to help.

So you say no profit made, but surely if it sold for £435,000, the profit would be the difference between that and what it was bought for? Or that and what it cost you? Which if it was left you it cost you £0?
I've never been through it but that would have been my understanding. Someone else may come along and clarify!

i think it is a scam - if the house was part of an inheritance, depending on the circumstances, I don't think you need to pay capital gains but maybe inheritance tax. Please call HMRC directly and not from the number on the letter.

Would it not be inheritance tax you'd pay on this rather than CGT?

Thats not how it works with inherited property. CGT is calculated on sale proceeds v probate value.

Nope you pay IHT on the estate and CGT on gains made by selling any of the estate.

This is incorrect.

As far as I understand it, CGT is only a possibility if you don't sell the inherited property for some time, keep it as an investment then sell it later, and it has gone up in value between the time of death and the sale.

Anyway, this sounds like a scam to me.

No it's not a scam and i can understand why it's sent. But I do need to find out why I am attached to this other property which though in the same town is nothing to do with my dad.

HMRC make mistakes all the time. I've had a situation where they wrote to an address I hadn't lived in for 10 years, demanding interest on money I had never owed. Literally every part of their letter was wrong. As well as phoning, I would write and get a written response. Otherwise in 10 years time, you'll be dealing with them again and they'll be demanding non-existent interest!

It will be a mistake HMRC are always making them. Call and advise you did sell a property which was X address but it was sold at a loss so no CGT to report or pay and advise that you have no connection to property Y at all.

i will draft and send a letter and call them, I don't want this following me around! Thanks for the good advice.