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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5112
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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, i'm self employed and inherited a property a few years

This answer was rated:

, i'm self employed and inherited a property a few years ago i mortgaged it so i could buy my current home and rented the inherited property out, if i sell the property do i have to pay capital gains tax on the full sale price? so if i sell it for £60,000 do i pay tax on all that?
and welcome to the site. Thank you question.

Please advise sale of which property are of talking about - is it the one
- inherited and rented out, or
- the property you are living in

Also what was the cost price of property you bought and
valuation of property you inherited?

Many thanks
Customer: replied 3 years ago.

the sale would be of the inherited property that i rented out, original cost was a right to buy from the council, my nan had lived there all her life i think she paid £8000 in total. the sale price is looking to be around 60.000

the property i bought to live in was 92,000

Paul, thank you prompt reply.

If it is inherited property, your gain will be the difference between the valuation of it at the time of inheritance (and not the cost price paid by your nan) and the sale proceeds.

Say the valuation at inheritance was £30,000 and you sell it for £60,000.
Your gain will be (60,000-30,000) = £30,000.
You would claim gains allowance of £11,000 against this gain and your chargeable gain after allowance becomes (30,000-11,000) £19,000.

CGT rate on this would be 18%, 28% or a combination of both depending on your total taxable income including this gain in the year the gain is realised.

Say your taxable income after personal allowance but before the gain is £20,000. First £11,865 of the gain will be taxed at 18% and the balance £7,135 at 28%.

This will make your total CGT £4,133.50.

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.

Customer: replied 3 years ago.

that is fantastic thanks you that up

Paul, thank you good words.

I am pleased .

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited . and other Tax Specialists are ready to help you
I thank you my answer.

Best wishes.