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Hi I have just inherited a house but wish to do improvements

Resolved Question:

Hi I have just inherited a house but wish to do improvements to it before I sell will I be liable for capital gains tax , I already own a home and work full time earning £20,000 p.a ?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello,
You might have to pay Capital Gains Tax if you sell, give away or exchange an asset you've inherited and it's gone up in value since the date of death.
Your actual CGT will depend on the amount you sell the property for.
The amount you pay for the improvements will be added to the value of the property when you calculate the capital gain.
You will look to the value on the date of death, add the improvement costs, and then the difference in that and sale price (if a gain) will be taxable. You do receive the annual allowance which would be subtracted from the gain.
If you decide to rent out the property, you'll have to pay Income Tax on any profit you make from the rental income - less rental expenses.
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15029
Experience: International tax
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