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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15980
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Inheritance Tax

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Inheritance Tax - Please explain the tax implications based on the below fictitious scenario.

Mr A owns property1:

Date of purchase Jan-2006

He lived at property1 as his main residence for 10 years (till end of Dec-2015)

He rents property1 for 40 years from Jan-2016 until Dec-2055

In Dec-2055 Mr A Dies at the age of 82.

Mr A buys property2 and lives there as his main residence from Jan-2016 until his death in Dec-2055.

If Mr A had sold property1 before he died, he could have claimed 10 years Private Residence Relief on the gain on disposal for the purpose of CGT.

Given that he did not sell both Property1 & 2 do they both come under IHT?


A deceased estate will include any assets owned by the deceased at the time of his demise. However, the properties will be included at their probate value for IHT purposes so the inherent gains will escape CGT but not necessarily IHT.

I hope this clarifies things for you but let me know if you have any further questions.
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