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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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I'm Angela, my brother and I inherited our father's house

Resolved Question:

Hi, I’m Angela, my brother and I inherited our father’s house which was valued for probate at £215,000. My brother wanted to sell the house for a quick sale at £200,000. My husband and I didn’t want to sell so offered him £100,000 for his half which he accepted and the house was transferred into mine and my husband’s name. We paid the solicitors fees. We then refurbished the house and rented it out for a few years and are now selling it. My question is at what rate will the CGT be worked out on? Would it be 50% of the probate value of £215k or 50% of £215k + £100k (£207.5K)?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Your cost for CGT purposes will be the sum of 50% of the probate value, 50% of the value of the property when you bought out your brother, the legal costs of buying your brother out and the cost of any improvements you made to the property. Transactions between connected people are deemed to take place at the open market value. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thank you for clarifying the position. Would improvements include the refurbishments, ie. rewiring, new kitchen, replacing rotten conservatory with new upvc conservatory etc?
Expert:  TonyTax replied 1 year ago.
You probably could have claimed all those costs apart from a new kitchen against the rental income as pre-let expenditure. If you didn't I'd claim them and the kitchen cost against the gain as they would certainly be reflected in the sale price.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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Customer: replied 1 year ago.
Thanks very much for your help.

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