tax on foreign property sale

[xyz123]

Hi - Looking for some advise on possible foreign property sale.

we are resident in the UK, pay tax here and own one home in the UK. We inherited a small property abroad and looking to sell it. Value of the property is not much circa £10,000 to 15,000.

what tax do we have to pay on the sale proceeds? HMRC website talks about Capital Gains Tax but as we "inherited" the property there is not "profit" as such. The property has been in our family for last 75 years and no records exist of the original sale price. Dont know how CGT applies in such instances

Any advise or links to any guidance very welcome.

Thanks

[Eric Mc]

You DO have to pay Capital Gains Tax (CGT) on the sale of foreign property if you are a UK tax resident.

You pay CGT on the "gain" between what you acquired the property for less the sale proceeds. You can also deduct any buying or selling costs from the gain to arrive at a chageable gain.

When a property is inherited, you are deemed to have acquired the property at its market value at the date of probate. So you substitute that for the purchase cost.

Each individual (up until 5 April 2023) gets an annual Capital Gains Tax allowance of £12,300. So this will be offset against the gain.

If the property is owned by more than one person, then each individual gets their individual £12,300.

Based on the figures you are quoting, it looks like any gains will be pretty much covered by the personal Capital Gains Tax allowance.

Note however that the £12,300 allowance is being slashed to just £6,000 on 6 April 2023.