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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My sister and I recently sold an inheritied property and I

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My sister and I recently sold an inheritied property and I understand we have to inform HMRC within 30 days of the sale date. How do I do that please? Is there an online form I can complete? My sister is not UK resident, will she be due to pay CGT?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Can you tell me when you inherited the property and what the probate value was please.
Customer: replied 1 year ago.
Hi TonyWe inherited the property on 13 March 2015 (the date my Aunt died). Probate value was £275,000.
Expert:  TonyTax replied 1 year ago.
Thanks. Was your sister non-UK resident at 5 April 2015?
Customer: replied 1 year ago.
Yes, she moved away in May 2007.
Expert:  TonyTax replied 1 year ago.
Thanks. Leave this with me while I draft my answer. It will take a while.
Customer: replied 1 year ago.
That's kind of you, thank you very much.
Expert:  TonyTax replied 1 year ago.
I'm not aware that a UK resident has to report the disposal of a UK residential property within 30 days of completion of the sale. For a disposal in 2015/16, the gain or loss will need to reported in a tax return for the year ended 5 April 2016 and any CGT paid by 31 January 2017. For a non-resident individual who disposes of an interest in a UK residential property after 5 April 2015, the disposal does have to be reported within 30 days of completion of the sale. The actual CGT payable can be deferred. There are three ways for a non-UK resident individual to calculate the gain and, in your sister's case, it will almost certainly be to her advantage to use the 5 April 2015 value of her share as her cost for CGT purposes which won't be any different from the probate value. Therefore, only the difference between her share of any net disposal proceeds and the 5 April 2015 value of her share will be liable to UK CGT. The first £11,100 of her gain will be exempt from CGT leaving a net taxable gain. There are two rates of CGT, 18% and 28%. The rate or combination of rates payable will be dependent on the level of your sister's UK income in the the current tax year. Assuming she has no UK income, then the first £31,785 of her net taxable gain will be taxed at 18% and any balance will be taxed at 28%. Take a look at the links below for more information: https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property Your sister can report the disposal of her share of the property using the form here: https://online.hmrc.gov.uk/shortforms/form/NRCGT_Return?dept-name=&sub-dept-name=&location=43&origin=http://www.hmrc.gov.uk I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thank you very much. My sister has had no income and I have had very little (only around £3,300). Please may I ask you one other question?
Expert:  TonyTax replied 1 year ago.
Yes, you can.
Customer: replied 1 year ago.
Thank you. The flat sold for £330,000, the gain for each of us is £27,500, minus the allowance of £11,000 so we are each due to pay 18% CGT on the balance of £16,500 each? Is that correct?
Expert:  TonyTax replied 1 year ago.
That would be correct. Your income is less than the personal allowance so you will have the full basic rate band of £31,785 to use which means your net taxable gain of £16,500 will be taxed at 18%. Your sister's net taxable gain will also be taxable at 18%.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15751
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
That's excellent, thank you very much...you've been very helpful.
Expert:  TonyTax replied 1 year ago.
Thanks.

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