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Sam
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We inherited our aunts estate which totals the amount of £550

Customer Question

We inherited our aunt's estate which totals the amount of £550 K (this including a bungalow which we are selling for £480K). I understand that from the total amount of £550K the sum of £325K is free and the remains is taxed at 40%. Do we additionally need to pay capital gains tax from the bungalow sale which seems very unfair?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.

Hi

 

Thanks for your question

 

Your understanding of Inheritance tax is correct.

 

The only capital gain consideration that might arise, is the small profit made, between the value of the bungalow at the time of it being gifted, and its sale, which if sold straight away will be less (I imagine) then £10,600 x amount of those who inherit. (But this when the will dictates that the bungalow be gifted to the beneficiaries)


However, if the bungalow is being sold as part of the winding up of the estate (so the will dictates that the bungalow be sold, and the proceeds divided up) then there is no capital gain position to arise at all.

 

So in essence you do not suffer Inheritance tax AND capital gains - which I agree would be grossly unfair!

 

Do feel free to ask any follow up questions, but it would be appreciated if you could rate the level of service I have provided, as this ensures that Just Answer pay me for the work undertaken.

 

Thanks

 

Sam

 

 

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