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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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We have a property that has been in the family for many years,

Resolved Question:

We have a property that has been in the family for many years, it was left to my father when his sister passed away in Feb 2008. The property was valued at the time at £140k by two Estate Agents. It was decided to renovate the property and about £50k was spent in renovation costs. In March 2009 renovation was completed and it was decided to rent the property out as the market for house selling had collapsed. In July 2012 my father passed away and the property is now owned by my mother, sister and me as tenants in common. The property is on the market for £185k and we have had an offer at this price. Could you let me know what the tax implications are?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

Can you confirm that from February 2008 to July 2012 the property was owned by your father solely please. If so, what was the property worth in July 2012 when your father died? Has it been let since 2012?
Customer: replied 3 years ago.

The property was in my fathers name from Feb 2008 to July 2012, the value of the property in July 2012 was £160k. The property was let between July 2012 and March 2014 and tax was paid on the rental income.

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.
Hi again.

If you sell the property for £185,000, you will make a gain of £25,000 (£185,000 - £160,000 probate value), £8,333.33 for each of you, your mother and sister.

As any individual can make tax free capital gains of £11,000 per tax year, unless your total respective gains for the tax year in which you sell the property exceed £11,000, you will have no CGT to pay.

I hope this helps but let me know if you have any further questions.
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