How to sell an inherited house and capital gains?
Discussion
As per title really, we’ve inherited a house, probate granted and inheritance tax paid.
(2 executors and 2 beneficiaries (brother and sister))
We now want to sell the house and are trying to work out;
1) what documents we need to give to conveyancer and where we get them from.
and 2) how we pay the capital gains tax.
(2 executors and 2 beneficiaries (brother and sister))
We now want to sell the house and are trying to work out;
1) what documents we need to give to conveyancer and where we get them from.
and 2) how we pay the capital gains tax.
If you’ve fully inherited the house then you will only have to pay tax on any gain, I assume between what it was valued for probate and what you sell it for. Those numbers should be approx the same.
You have to fill in and submit a form SA108 if it’s like a BTL reporting the gain. Your solicitor will be able to help out with the number.
You have to fill in and submit a form SA108 if it’s like a BTL reporting the gain. Your solicitor will be able to help out with the number.
Edited by muscatdxb on Sunday 11th August 17:40
muscatdxb said:
If you’ve fully inherited the house then you will only have to pay tax on any gain, I assume between what it was valued for probate and what you sell it for. Those numbers should be approx the same.
You have to fill in and submit a form SA108 if it’s like a BTL reporting the gain. Your solicitor will be able to help out with the number.
Solicitor or accountant?You have to fill in and submit a form SA108 if it’s like a BTL reporting the gain. Your solicitor will be able to help out with the number.
Edited by muscatdxb on Sunday 11th August 17:40
NDA said:
How long did probate take?
Asking for my other half who is anxious about IHT becoming due.....
Recipients arent liable to pay iht - its paid from the estate before probate is even applied for.Asking for my other half who is anxious about IHT becoming due.....
CGT is due on any gain between probate valuation and you selling it - in the current market it’s not likely to be an issue unless it was valued at below market value, which it shouldn’t of been.
NDA said:
How long did probate take?
Asking for my other half who is anxious about IHT becoming due.....
Me and my sister applied for probate ourselves a few weeks ago and it took 12 days from start to finish including releasing savings etc from the bank.Asking for my other half who is anxious about IHT becoming due.....
I was expecting around 3 months.
eliot said:
NDA said:
How long did probate take?
Asking for my other half who is anxious about IHT becoming due.....
Recipients arent liable to pay iht - its paid from the estate before probate is even applied for.Asking for my other half who is anxious about IHT becoming due.....
CGT is due on any gain between probate valuation and you selling it - in the current market it’s not likely to be an issue unless it was valued at below market value, which it shouldn’t of been.
eliot said:
Recipients arent liable to pay iht - its paid from the estate before probate is even applied for.
Except for certain gifts:'How Inheritance Tax on a gift is paid
Any Inheritance Tax due on gifts is usually paid by the estate, unless you give away more than £325,000 in gifts in the 7 years before your death. Once you’ve given away more than £325,000, anyone who gets a gift from you in those 7 years will have to pay Inheritance Tax on their gift.'
Marcellus said:
As per title really, we’ve inherited a house, probate granted and inheritance tax paid.
2) how we pay the capital gains tax.
Once the property has been sold, you will need to register individually here to set up an account and pay the CGT within 60 days.2) how we pay the capital gains tax.
https://www.gov.uk/report-and-pay-your-capital-gai...
You will then need to include the sale on a self assessment tax return and include the reference for the CGT paid above, so that the tax due from those transactions is NIL.
MaxFromage said:
Once the property has been sold, you will need to register individually here to set up an account and pay the CGT within 60 days.
https://www.gov.uk/report-and-pay-your-capital-gai...
You will then need to include the sale on a self assessment tax return and include the reference for the CGT paid above, so that the tax due from those transactions is NIL.
Perfect, many thanks, exactly what I needed to know.https://www.gov.uk/report-and-pay-your-capital-gai...
You will then need to include the sale on a self assessment tax return and include the reference for the CGT paid above, so that the tax due from those transactions is NIL.
MaxFromage said:
Marcellus said:
As per title really, we’ve inherited a house, probate granted and inheritance tax paid.
2) how we pay the capital gains tax.
Once the property has been sold, you will need to register individually here to set up an account and pay the CGT within 60 days.2) how we pay the capital gains tax.
https://www.gov.uk/report-and-pay-your-capital-gai...
You will then need to include the sale on a self assessment tax return and include the reference for the CGT paid above, so that the tax due from those transactions is NIL.
If it was specifically left to the brother/sister in the will then it may well be but if it is part of a wider "the rest of my estate" bequest then it’s likely to be sold from within the estate and the funds then distributed to the beneficiaries in which the estate pays the cgt first.
Similar effect but different paperwork, I think there are some different cgt limits etc for estates so may be worth getting an accountant to look at this.
Steve H said:
I think it depends on whether the house is actually transferred to the two beneficiaries or not.
If it was specifically left to the brother/sister in the will then it may well be but if it is part of a wider "the rest of my estate" bequest then it’s likely to be sold from within the estate and the funds then distributed to the beneficiaries in which the estate pays the cgt first.
Similar effect but different paperwork, I think there are some different cgt limits etc for estates so may be worth getting an accountant to look at this.
Ah, I didn't read it that way. Yes it will depend if the estate is selling it or if the title has been transferred to the beneficiaries.If the estate is selling, the personal representative may need to do a trust and estate tax return. Though consideration should be given to potential taxation via the different methods.If it was specifically left to the brother/sister in the will then it may well be but if it is part of a wider "the rest of my estate" bequest then it’s likely to be sold from within the estate and the funds then distributed to the beneficiaries in which the estate pays the cgt first.
Similar effect but different paperwork, I think there are some different cgt limits etc for estates so may be worth getting an accountant to look at this.
Along similar lines, if someone has been left a property in the will, can the executor sell the property as part of the estate (after probate has been granted) and the money go to the benefactor or must probate be granted and the deeds/title be transferred to the benefactor who can then sell?
If the benefactor is not a UK resident or tax payer must CGT still be paid?
If the benefactor is not a UK resident or tax payer must CGT still be paid?
Marcellus said:
Currently in the name of the deceased…
In which case you probably (depending on the details in the will) have the choice of transferring the property to joint ownership of the two beneficiaries, or selling it from the estate and splitting the proceeds after the tax has been paid. Thanks for your thoughts previously….. we’ve now sold the house for significantly (60%) more than the probate valuation (dodgy estate agent wanting to introduce us to a friend who was a developer and would take it off our hands) which remained within the estate and are wondering whether we should revise the probate evaluation and pay the additional inheritance tax or whether the beneficiaries should declare the capital gains and pay the tax.
I think they’ll pay less take if they take the cgt route but not certain and if that is the case surprised the hmrc allow that loop hole)
(btw the sale wasn’t that easy as we discovered that the property wasn’t in the name of the deceased but his mother who died 10years ago… fortunately he was sole beneficiary of her estate
I think they’ll pay less take if they take the cgt route but not certain and if that is the case surprised the hmrc allow that loop hole)
(btw the sale wasn’t that easy as we discovered that the property wasn’t in the name of the deceased but his mother who died 10years ago… fortunately he was sole beneficiary of her estate
Edited by Marcellus on Thursday 19th December 18:51
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