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bigduckontax, Accountant
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An elderly couple owned a plot of land as tenants in common.

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An elderly couple owned a plot of land as tenants in common. They were in the process of selling when the husband died. The sale was completed after his death.Her 50% share would be subject to capital gains tax as normal. Would the the half share previously his,now hers incur any CGT allowing for the fact that the inheritance value and the sale value were the same?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.

Firstly there is no CGT on death, all assets being valued for Inheritance Tax (IHT) purposes.

Your question is beautifully complicated though. The completion date is actually irrelevant, it is the contracts exchange date which is the key. From that day the vendor is contracted to sell. You say that she inherited his share making it even more complex. This would expose her to CGT on his half also, but only on the gain made between the inheritance date and the sale date which is likely to be zero, the taxation equivalent of a lemon! For her half share the CGT bill would be the gain taxed at 18% or 28% depending on her income including the gain in the year of sale and she has an Annual Exempt Allowance of 11K to offset the gain. At this stage I will not dwell on Letting or Entrepreneur's Reliefs as the lady's exposure to CGT is actually outside the scope of this query.

Now IHT only kicks in when estates exceed 325K and the surplus is subject to 40% flat rate taxation, but inter spousal bequests don't count and inflate the 325K accordingly. Depending upon the disposition of the husband's assets there might well be no IHT bill anyway.

I do hope I have helped in this thoroughly delightful, from a professional's point of view, problem.
bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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