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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 19978
Experience:  International tax
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My two brothers and myself inherited our parents house back

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Hello, my two brothers and myself inherited our parents house back in 2012 when they both passed away and since then our aunt has been living at the property rent free but has had to go into a home. We are now in the process of selling and was wondering about capital gains tax and how we can reduce how much we pay. I personally do a self assessment each year as i have my husbands parents house in my name and rent it out and he is in the 40% tax bracket. Any advice would be appreciated
Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: my younger brother lives in australia

Hello and thank you for allowing me to assist you.

Each of you will need to report your share of the house split 3 ways.

  1. Work out the gain for you’ve disposed of in the tax year. Your cost is the value when you inherited

  2. Add together the gains from all assets sold in the year.

  3. Deduct allowed losses.

The tax year runs from 6 April to 5 April the following year.

Non residents (like your one brother) are still taxed on UK located property).

You need to pay Capital Gains Tax when you sell an asset if your total taxable gains are above your annual Capital Gains Tax allowance.

The Capital Gains tax-free allowance is:

  • £11,700
Customer: replied 10 months ago.
would it be best to gift half my share to my husband to reduce the amount we pay in capital gains tax

Transfers between husbands and wives and civil partners are generally exempt from inheritance tax (IHT) and capital gains tax (CGT). He would retain your cost in the property for reporting. This provision is a benefit to wealthier married couples because it allows them to make optimum use of both their CGT annual exemptions.

Customer: replied 10 months ago.
does that mean when we sell he wouldn’t have to pay CGT.

He would not pay if he sells his portion for less than his allowance. The same rules apply to him as would apply to you. The gain i the difference in the market value when inherited and the sale price. Then his allowance is applied. If he can reduce all by his allowance he would not pay.

Customer: replied 10 months ago.
our share would be roughly £86000 (£43000each) what would we pay. i presume on my share and my husband 28% on his share after deducting the allowance of £11,700 is that correct

If you give him you share then the property is split (for sale) between him and your 2 brothers. You do not report anything.

Customer: replied 10 months ago.
thanks for you hepl

You are most welcome.
A positive 5 star rating is appreciated so I am credited

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