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Sam
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Category: Tax
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My mother left me her half of the family home when she died

Resolved Question:

My mother left me her half of the family home when she died in 2008. The value of her half was £150,000
My father continued to live in the house but died a couple of months ago. He has obviously left the rest of the house to me.
Total value of the house now is £350,000.
I am advised by my solicitor I am liable for Capital Gains Tax for the increase of £25,000 my mothers haous has increased in the last 7 years Is that correct?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
If you plan to sell then yes you have a capital gain consideration as this has never been your main residence, but its not quite as the solicitor advises
You have a gain of £200,000 made since 2008 - (current value £350K and value at time of inherited half share £250K so and half of this gain is deemed to be yours - so £100,000
The first £11,100 is then the rest is liable to capital gains tax.
(if a higher rate taxpayer then all of the gain left at 28% and if a basic rate taxpayer - unused basic rate band at 18% and any additional gain at 28%
If you decide not to sell at this time, and the property increases in value between now and the sale date - then this additional gain will also need to be considered.
Let me know if you wish any further assistance with this matter.
Thanks
Sam
Customer: replied 2 years ago.

I am a bit confused with your answer.

The total price of the house in 2008 was £300,000 (including my fathers half) My mothers half was worth £150,000 not £250,000. The total increase on the house has only been £50,000 (my half has only been £25,000) in the 7 years not £200,000

Expert:  Sam replied 2 years ago.
Hi Daniel
Thanks for your response
I do apologise - as her half share was only £150,000 in 2008 (I read that to mean the property was valued at £150,000 in 2008) - that meant the property was worth £300,000 in 2008
Its now worth £350,000 and less the value in 2008 - leaves a gain of £50,000 of which your half share is £25,000
Then the first £11,100 is exempt - and the reminder is liable to capital gains tax.
(if a higher rate taxpayer then all of the gain left at 28% and if a basic rate taxpayer - unused basic rate band at 18% and any additional gain at 28%)
Again very sorry for my misreading the information in your initial question
Let me know if I can be of any further assistance.
Thanks
Sam
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