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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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My dad recently paased away. I was on the deeds of the house

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My dad recently paased away. I was on the deeds of the house and the house now passes to me. I have my own property and have been told I'd be subject to capital gains tax. The house though has to be sold and the money split 5 ways amongst my siblings. My sister would like to sell her own house and buy my parents house. To aviod the capital gains tax could she sell her own house, then I sign the deeds over to her and she share the profits with us (siblings) frim jer own house sale?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your question.

Please advise if your father's name was also on the deeds or are you the only person.

I presume the will stipulated that the beneficiaries are 5 children.

Is the property value when sold likely to be higher than probate value.

Many thanks

Customer: replied 1 year ago.
Both parents names were on the deeds. There is no will. What is the probate value?
The property value will be approx £90,000 -£100,000
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply..

Probate value is the figure used to ascertain total asset base of the deceased for inheritance tax purposes.

If the property was the asset with the highest value, then it is likely total estate is worth less than £325,000 threshold for inheritance tax purposes.

You can do a deed of variation so that the proceeds from sale of property go to all siblings. You can also have a written agreement amongst the siblings that your sister would purchase the parents home via sale of her own property and use proceeds from sale of her house to buy your share of the parent's property.

Capital gains tax would only come into play if the property value at point of sale is greater than the value at the time of death.

More information on variation to distribution of estate can be found here

http://www.steelerose.co.uk/how-to-save-on-tax-using-a-deed-of-variation/

http://uk.practicallaw.com/4-500-3058

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.

Please only rate my answer if it is acceptable.

Customer: replied 1 year ago.
Thanks and that is the same advice for scottish law?
Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply.

The same advice applies for Scottish law.

I hope this is helpful

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