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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have sold a house as part of an estate, but house sold for

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I have sold a house as part of an estate, but house sold for more than given in probate. I understand there is capital gains tax to pay, but confused which figure you calculate the tax against. House had a mortgage, legal and estate agent fees etc, plus debts to pay for probate. So do I calculate CGT on the amount my brother and I share once everything else is paid, or do we calculate on the full house price as sold.
JA: What are the assets or property for this capital gain?
Customer: the property was left to myself and brother; we made decision to sell but it sold for more than original value given by estate agent
JA: Anything else you want the Accountant to know before I connect you?
Customer: does the estate pay the CTG or do we need to pay our CTG separately from our inherited share

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

HI

IT will be the gain between sale price less probate price

This forms the initial gain from which you then deduct the costs to sell so legal fees and estate agents

Then what is left over is split accordingly ( I assume 50:50) and they are the figures each of you declare

So half the sale value

Half the probate value

Half the costs to sell

Half the net position

Then each of you get an annual exemption on your share with any remaining gain liable to capital gains tax

You each pay the capital gains not the estate unless the will stated that the house be sold as part of the terms of the will so please verify

Thanks

Sam

Customer: replied 1 month ago.
The will said the house left to both of us, so would presume sale. I have read that there are some allowances, for example I had to have roof replaced, as leak happened whilst we were clearing for sale

Hi

No - if house left to you then you have the capital gains not the estate

Was the complete roof replaced or just some of it ?
Thanks

sam

Customer: replied 1 month ago.
we had to replace entire roof as was found to be in terrible state - flat roof. Cost just over £6k

Hi

#

Then yes each of you can claim £3000 against your share of the gain after the probate value and the estate agent and legal fees to sell

Thanks

Sam

Customer: replied 1 month ago.
my brother has had nothing to do with the sorting of the property; I've had to pay all the cost for the roof and decoration to make the place fit for sale, so does he benefit from the reduction? Also can you clarify at which point the CTG is calculated - is it just against our split inheritance figure, after everything (probate, estate, legal, debts against the estate etc) is taken or before?

Hi

You said it had been left to both of you so all costs split - so yes if you paid it all then he benefits from the reduction so you may wish to discuss that with him - that maybe e pays some of your capital gains bill to balance things out

No the sale of this house has nothing to do with the will or probate of legal fees or debts this is merely the position of having been left a house on which you will sell and a gain has been made as its ioncraesed in value since the property was left to you and your brother

Thanks

Sam

Customer: replied 1 month ago.
the probate has been going for 3 years; death in 2017 house sold in 2018. No further gains have been made with the house sale funds, i.e. has just been sat in executors bank account. Do we pay CGT once, or for each tax year?
Customer: replied 1 month ago.
sorry death 2016, probate 2017, house sale 2018

Hi

No capital gains just once at triggered by the sale

Thanks

Sam

Customer: replied 1 month ago.
ok thank you. One final question, presume it is our own responsibility to declare and pay our own share of CGT. Am I only responsible for telling him there is CGT to pay once he receives his share of the inheritance?

Hi

Yes you do declare your own capital gain and yes you are responsible for telling him this - as someone has to ensure the figures are supplied to relevant parties so they can make this declaration so I would be inclined to give him a copy of this exchange between us so he has the same information as you

Do let me know if I can assist further, but if you have all that you need for now please do rate me for the level of service I have provided, or click accept

Thanks

Sam

Customer: replied 1 month ago.
Great than you very much for your help
Customer: replied 1 month ago.
Can I get a transcript of this conversation?

HI

You will have to copy and paste I'm afraid ! (The site isn't quite there with modern technology!)

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 1 month ago.
ok :)