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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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i was executor for my aunts property in 2003. It was a maisonette

Resolved Question:

i was executor for my aunt's property in 2003. It was a maisonette and as we had problem selling had to apply for an extention to the lease. We finally sold DEC 2004 and the proceeds split beteen 3 siblings.It was not rented out at any time.
I have just received a letter from HMInland Revenue to say they have been doing an audit and I may be liable to Capital Gains Tax. The property was under the Inheritance Tax threshhold and I did not even think of Capitals Gains
I have until 9th August to say I will disclose any info to the Revenue.
I am at a loss as to what to do as I do not have docs now nor do I think I should be liable for the tax.
What are your thoughts? Krgrds STEPHANIE cOLE
Submitted: 4 years ago.
Category: Law
Expert:  Joshua replied 4 years ago.

Josh-2010 :

Thanks for your question. Please kindly RATE my answer when you are satisfied

Josh-2010 :

When did your aunt pass away please?

Josh-2010 :

Do you recall the probate valuation and the amount paid for the extension and then finally the amount the property was sold for? Ballpark figures will suffice to the best of your knowledge?

Customer: My Aunt passed away Feb 2003. From what I remember the value of property was £149000 and the extension to the lease was about £30000.
Josh-2010 :

Thanks. And the amount the property was sold for was roughly how much?

Customer: Roughly £149000 I think
Josh-2010 :

Thanks. So the property did not sell for more or much more than the probate valuation from what you say?

Customer:

I cant remember in all honesty. We didnt do anything with the property for the first few months at all. I guess if we had it valued with out the lease extension it would have been valued lower as there was only about 25 yrs left on the lease so the probate may have been lower.

Josh-2010 :

Thats fine. Thanks.

Josh-2010 :

The position is that CGT will be payable between the difference between the probate valuation of the proeprty and the amount the property was sold for however you are entitled to deduct any monies from the sale price in respect of fees incurred in selling (e.g. agents and solicitors) and any monies associated with the lease extension. There is also an annual allowance you can apply.

Josh-2010 :

If having done the above you find that there is a possible tax liability then you may wish to consdier requesting that the Revenue revalue the property prior to calculating CGT - providing that such revaluation does not push the estate into an inheritance tax threshold.

Josh-2010 :

This is the form you need to request such a revaluation if this is necessary.

Josh-2010 :

http://www.hmrc.gov.uk/forms/cg34.pdf

Josh-2010 :

Is there anything above I can clarify for you?

Josh-2010 :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Josh-2010 :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Customer:

Hi Thanks for the answer. It is just really difficult when I do not have the exact figures or documents to know if there was a difference between the valuation at probate and selling. The solicitors we dealt with is not in business now either.

Josh-2010 :

Do not panic unduly. Remember that the beneficiaries will have to repay any monies from their shares if tax is due

Josh-2010 :

You will hopefully find that little or no tax is payable on further investigation based on the ballpark figures you provide above

Josh-2010 :

If this answers all your questions, I should be very grateful if you would kindly take a moment to rate my service to you today.

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