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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4973
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My mother in law died in September 2015 and as my Grandfather

Resolved Question:

My mother in law died in September 2015 and as my Grandfather was already dead, his share of the estate passed to my Nan. Sadly my mother had also died back in 2004 with a heart attack and so when my Nan died I was made executor of her will and my sister and I inherited her house. The total estate value was £430K.
We got the house valued when she died and it was valued at £325-£330k and the house was sold for 315k and completed this week.
Nobody lived in the house since my Nans death.(Sept 2015 - June 2016)
Please are we liable to any capital Gains Tax on this house sell?
Many Thanks
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

If the value of the property you inherited was £325-£330k at the time of death and its sale price is £315k then you have not made a gain.

As there is no gain, there is no capital gain tax payable.

You should still declare the sale of property in supplementary pages SA108 of your tax return as the sale proceeds are in excess of £44k.

You should register the loss made to enable you to offset it against future capital gains.

More information of capital gains summary can be found here ..

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/420007/sa108-notes-2015.pdf

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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Customer: replied 2 years ago.

Sorry based on my earlier above question, which you kindly answered.

When my mother in law died, the original house valuation was for £290k, but the house actually sold for 315k.

Does this mean that the C.G.T. is £25k - Minus £11,500 allowance @ 28% = £4000 due.

Please are my calculations correct?

Also when would this amount be due to be paid and I presume the balance of the estate can be distributed now?

Many Thanks

Expert:  taxadvisor.uk replied 2 years ago.
Greg, thank you for your reply.

If the property was in your name only then your chargeable gain would be (315-290) = 25k less any selling expenses e.g. estate agents fees, solicitors charges.

If the property was sold in tax year 2014-15 then the gains allowance is £11k and 14k would be chargeable to CGT.

CGT rate applicable would be 18%, 28% or a combination of both depending on your total taxable income in the year of sale. Worst scenario means CGT (14,000 x 28%) £3,920.

I hope this is helpful
Expert:  taxadvisor.uk replied 2 years ago.
You asked -
Also when would this amount be due to be paid and I presume the balance of the estate can be distributed now?

You would report the gain in your tax return (I presume it is tax year ended 5 Apr 2015).
Tax would be payable no later than 31 Jan 2016.

I hope this is helpful.

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