CGT Advice

[padgett]

I'm in the process of selling a house I own following the death of my mother last year.

I seem to be liable for a fairly substantial CGT payment and need some advice fairly soon to minimise it.

I'm happy to pay for some proper advice, but am struggling to find an accountant to assist.

Any recommendations?

Edited by padgett on Wednesday 12th January 11:26

[andy43]

Not an accountant. I've just paid CGT this morning. Struggling to sit comfortably now, and that's despite liberal lube application beforehand. Typing this standing up.
My condolences but are you sure CGT is due on an inherited house - have you refurbed it or has it gone up hugely in value since inheritance? Again, I'm not an accountant.

My accountant - BTL just sold - said:

The purchase cost is enhanced by:
Legal fees & stamp duty on purchase
Initial refurbishment pre letting
Any structural improvements during ownership (not already offset against rental income)
Refurbishment pre-sale to get the property to a saleable standard
Selling costs (estate agents etc)
Each owner has 12300 CGT allowance if not already used elsewhere.
Ongoing costs (insurance, gas safe, maintenance etc.) were relievable against the rental income not against the Capital Gains Tax.
Tax is currently 28% if you’re a higher rate payer (or have no basic rate band left) or 18% within the basic rate band (up to c£50k then increases to 28% on the rest).
Tax is now payable 60 days after completion and the details have to be returned to HMRC within the same time frame.

First step is register for a Gov CGT account so you can declare it all - I've done it myself and it only took half an hour at the most.

[av185]

Be helpful to clarify whether you own the house as a result of the will and your mothers passing or rdd you already own it.

[Hussein-z3ksd]

andy43 said:

First step is register for a Gov CGT account so you can declare it all - I've done it myself and it only took half an hour at the most.

What does it mean purchase cost is enhanced by the Stamp Duty?

[Eric Mc]

Why are you struggling to find an accountant? They aren't exactly thin on the ground.

e-mail sent

[andy43]

Hussein-z3ksd said:

andy43 said:

First step is register for a Gov CGT account so you can declare it all - I've done it myself and it only took half an hour at the most.

What does it mean purchase cost is enhanced by the Stamp Duty?

I just copied and pasted. It was a BTL in our case so I'd guess initial SD could have been offset against final CGT on an investment property but it didn't apply to us so I'm guessing!

[Eric Mc]

Capital Gains Tax will be payable on any gain in value of the property from the date of probate to the date of disposal.

Normally CGT is based on the sale proceeds less the purchase cost. However, with an inherited property, there is no purchase cost. Therefore, the probate value at the date of probate is used as the "base cost" instead of the (non-existent) purchase cost.

[padgett]

To clarify a few points:

I've owned the property since 2000. My mother lived in it, so it wasn't my primary residence (effectively a BTL). I recieved Housing Benefit for the duration (a fraction of the market value incidentally).

I calculate my liability to be be around £30k (using an online calculator).

I need advice on things like, if I quit my job to reduce my salary, does this help? Does putting it in a pension help? etc.

I've contacted a couple of accountants by email, by haven't heard back. I need some practical advice.

Eric: we met many years ago - I'll email you.