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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Myself and my bother inherited a leasehold property from our

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Myself and my bother inherited a leasehold property from our mother. We did not change her name to ours on lease as advised we can do this at time of sale in the future. Property being sold now and recently advised our CGT allowance might be less if name was changed into ours before sale. We are both tax payers at the 20% level. Can you advise as accountants and lawyers have not been able to do so.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 1 year ago.

The cost of the property for CGT purposes is its value when your mother passed away. If the property is sold by the estate, it (the estate)will get a CGT exemption if the sale occurs either in the tax year of the passing of your mother or either of the next two tax years. The net taxable gain would be charged to CGT at 28%, the rate of CGT for trusts.

If the property is transferred out of the estate into the names of you and your brother before the sale, then you will each be able to use your CGT exemption against your respective shares of the gain. Individuals pay CGT at 18% or 28% or a combination of the two rates depending on the level of their income in the tax year of disposal on residential property gains. Non-residential property gains are taxed at 10% or 20% or a combination of the two rates depending on the level of their income in the tax year of disposal. Take a look here for information on how to work out your CGT. There is a helpful calculator that I use here.

I haven't a clue as to what was behind the advice that your CGT allowance would be less if the name on the deeds was changed before the sale.

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

Expert:  TonyTax replied 1 year ago.

Information on CGT here.

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