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Selling a property Capital Gains or Tax return?

6 replies

sallydontlivehere · 09/04/2021 10:50

Sorry for the daft question.
I'm selling a probate property as my Mum died last year.
I had been renting out the place (it was her former home) to pay for her care home - so I've been completing a tax return for her.
I've now sold the house, made £5k Capital gain so I don't have to declare it.
But can I claim the expense of selling the house eg legal expenses and estate agent commission on my tax return (where I declare the previous rental income)?
I am on the phone to HMRC - but that could take a while Confused

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catndogslife · 09/04/2021 11:12

It depends on who owns / owned the property.
If it was you, then the income and expenses go on your tax return.
If it was your mother then the rent on her tax return and selling costs are taken out of her estate.
If it was joint ownership then I would say 50% each.

sallydontlivehere · 09/04/2021 12:41

That's interesting @catndogslife - HMRC told me something different - but they always do, every person who works there gives a different answer, I'm surprised it's not more standardised to be honest.

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WhyMeLord · 09/04/2021 13:43

At a very high level costs of selling an asset which is subject to cgt are deducted from the proceeds eg

Gross proceeds 100
Less incidental costs of sale (10)
Net proceeds 90
Less cost (50)
Gain 40

This is very noddy and simplified but that's the basics.

Without trying to sound insulting, how did you determine the gain and are you sure it's correct when you factor in that it's a probate property?

sallydontlivehere · 09/04/2021 13:51

I calculated the gain by:

Sale value Minus expenses = X
Probate value = Y

Gains = X-Y

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sallydontlivehere · 09/04/2021 13:52

The probate value was done by a proper valuer and the value accepted by HMRC before probate was granted (as it was part of a larger estate and HIT was due)

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sallydontlivehere · 09/04/2021 13:53

I'm going to leave the cost of the sale off the SA and not deduct it.
That seems the most common sense thing to do.

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