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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13997
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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JHello My husband and I were planning to separate, I have

Resolved Question:

JHello
My husband and I were planning to separate, I have been having a house built, ready for me to move into , but recently my husband passed away and I have found that he has left me all of his estate including the family home of which I owned half, he was planning to sell it and we were to settle the proceeds between us, now I don’t know what to do if I continue to move into the new house , can I sell the family home and what tax am I liable for ?.
The family home is worth £300,000 and has no morgage .
But I am confused if I sell the new one do I pay tax it is in my name only ?
Your advice would be appreciated
Kind regards Sue
Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: No don’t think so I am 63 and self employed
Submitted: 18 days ago.
Category: Tax
Expert:  Sam replied 18 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Customer: replied 18 days ago.
Thankyou
Expert:  Sam replied 18 days ago.

Hi

Thanks for your patience

Could you advsie me

When did you move out from this family home that was to be sold (hat you have now inherited the other half from your husband)

AS this will determine whether there is anything at to pay on its sale

When do you plan to move into the new build

Thanks

Sam

Customer: replied 18 days ago.
I moved out about 6 months ago and moved in with my son, but came back daily to look after my dogs
The new build is not ready till next spring
Expert:  Sam replied 18 days ago.

Hi

Then if you sell within the next 12 months then you will have no capital gains as for all individuals - the time they lived there AND the last 18 months of ownership are fully covered by the private residence relief rules - so you can proceed with this sale and unless its after Oct 2018 then nothing to report to HMRC (even if you are then living and have full ownership of the new build)

And the half you inherited also falls within these rules, and also there would also be no Inheritance tax to pay on your Inheriting your late husbands share - so no need for you yo have any concerns about this sale even with the change of circumstance

IF it had not half been in your name and you had inherited it after you had moved out, then there would be a small capital gain position to consider but as husband and wife you are both treated as having owned 100% of the property for the whole period.

Let me know if you require any further assistance or clarification

Thanks

Sam

Customer: replied 18 days ago.
Thankyou if I choose to sell my new build will this change anything I don’t know where I want to live now
Expert:  Sam replied 18 days ago.

Hi

Thanks for your further question - that is slightly more complicated as you would never have lived here but if you sell as soon as its completed I would assume there would be very little gain made between the sale price and the purchase price- and its that figure that a gain is based on.

And as the first £11,300 is exempt - then you may have no gain to declare.

If you decided to keep the new build and rent it out - then clearly the value of the propriety would increase and therefore the capital gain would also increase and if you never live here then this will also be a capital gain consideration

However if you move in only short term (or long term) to make it your main residence and then sell, make sure all aspects of you life are conducted there for the whole period such as utility bills, bank dentists, doctors, tax office etc etc as this address held and then you will be due private residence relief for the time you lived there and then up to a furtehr 18 months of ownership and IF after you have lived there you then let it out - you then qualify also for private lettings relief which furtehr reduces any gain

Also note if you decide to let out the family home and then sell after 18 months of this being your main residence then again you get private residence relief for the time you lived there and the last 18 months of ownership and also private lettings relief, so this allows you to have choices here

Thanks

Sam

Customer: replied 18 days ago.
I think I understand I just don’t know what to do , If I left my home empty , for a few months and moved into the new build would this be ok
Customer: replied 18 days ago.
Sorry I’m a bit stupid
Expert:  Sam replied 18 days ago.

HI

Yes as advised above you have 18 months to sell the family home before any capital gain would arise so you can rent it out. or leave it empty so as you moved out 6 months ago you have a year left

Let me know if you need anything else, or, if you have all that you need, it would be appreciated if you could rate me for the level of service I have provided, or click accept

Thanks

Sam

Customer: replied 18 days ago.
It sounds ridiculous but I love the home and the new build was a new future but it has now become a worry
Expert:  Sam replied 18 days ago.

Hi

Well I hope to have alleviated that worry from a tax perspective.

Thanks

Sam

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