Capital Gains Tax Inherited Property

[CellophaneFlower]

Just wondered if anybody might have any insight on this.

My dad died intestate. His property is therefore shared between myself and my sister. I applied for probate in just my name as you're unable to apply online if there is more than 1 executor to be named. That's all gone through and house is SSTC. Still in my dad's name land registry wise though.

There's been an increase in value since I applied for probate, so I know we'll need to pay CGT on the increase, all fine. However, it's just occurred to me that since I'm the 1 named as selling the house could this mean that only my CG allowance will be used against the amount and not my sister's too? I thought not, as obviously I'm just acting as sole executor, then will distribute his estate as legally required (give half to my sister), but how does the CGT work? Would we both just separately fill out a form after the sale and pay our dues? Just had a panic as my sister isn't named anywhere!

Thanks for any help!

It's the beneficiaries that pay the cgt not the executors.

Also, probate is estimate of value not actual value so you might not need to pay cgt on the whole lot. Be careful if it wasn't an exempted estate as iht rates are higher than cgt so you will need clear valuation evidence.

It seems to depend on whether you as executor sell the property, or transfer it into the beneficiaries’ names before the sale.

www.pem.co.uk/article/capital-gains-tax-selling-a-property-after-death/

@beenbotheringme

Also, probate is estimate of value not actual value so you might not need to pay cgt on the whole lot. Be careful if it wasn't an exempted estate as iht rates are higher than cgt so you will need clear valuation evidence.

Thank you. My mum's iht allowance carried over, so we were under the 650k I think it was. When I filled out the form I just used the highest valuation from an estate agent. I suspect the property was undervalued as it was during a lockdown so a desktop valuation. The property is quite unique plot-wise, so has ended up selling for 60k more than I put on the form after only a few months, but I doubt I can query this now?

[quote MsMarple]It seems to depend on whether you as executor sell the property, or transfer it into the beneficiaries’ names before the sale.

www.pem.co.uk/article/capital-gains-tax-selling-a-property-after-death/[/quote]
Thanks... this was what I was concerned about. I've just called HMRC who confirmed that the tax has to be paid by the individuals who are legally entitled to inherit, regardless of who has sold the house, so it seems we should both be able to use our allowances.

I think you did the right thing there- If you take your queries to HMRC I generally find they are helpful, and they document calls, so they have evidence you did your best to do what you should. I do make a note of any calls. You can also contact them online, and there are ways to save the exchange so you have a record.

@BlueMongoose

I think you did the right thing there- If you take your queries to HMRC I generally find they are helpful, and they document calls, so they have evidence you did your best to do what you should. I do make a note of any calls. You can also contact them online, and there are ways to save the exchange so you have a record.

Thanks... I will follow up with an email actually, just to have confirmation, good idea. They were really helpful. There's so much online but it's such a minefield, so much easier to talk to an actual person sometimes!

Yes I was also going to suggest that you call hmrc.

If you have lots of allowance left you can get a valuation from a red book surveyor - they will basically look at what it has sold for and work out what the valuation should have been.

Assuming the property was worth £600k have prices really gone up 10% in your area?