Capital gains tax on sale of house?

[mariner2]

Myself and my brother have inherited my mother's house and wish to sell it - will we be liable to capital gains tax on the sale and if so how much?

[Barmaid]

It depends. What was the value of the house for probate? How long ago was it? What is the value now?

[factor-fiction]

Barmaid will tell me if I'm talking nonsense but in addition to her points I'm wondering whether it matters whether the house is your only property or not.

[Barmaid]

It might, Factor. But it really depends on the above. Plus there is a way to mitigate the tax in these circumstances.

[VHG]

My family are just selling my mothers late home.

The house sold for more than the estimate so we may have to pay CGT on the "extra" or profit, but we do not have to pay CGT on the main value of the house.

Her estate was above 650k (shared husband/wife amount for inheritance tax) so we paid some IT, but I dont think you have to pay CGT on the house if she died recently.

[VHG]

Have you seen this?

http://www.hmrc.gov.uk/cgt/intro/basics.htm

[mariner2]

Thanks for the help. Its a recent aquisition and will go on the market for 122k, both myself and my brother live elsewhere.

[Barmaid]

If the house was valued at probate for £100,000 and you sell for £122,000, there is a £22,000 capital gain. If the house is still in the names of the executors, this is a gain in the hands of the executors. Once the executors' CGT allowance is taken off, the rest of the £22k is taxable.

HOWEVER, if the house sale proceeds are not needed to pay any of the costs or liabilities of the estate, you can "appropriate" the house to yourself and your brother and have the executors sell it as bare trustee (appropriation is only a paper exercise). That way the gain is £11k to you and £11k to your brother. You can then use your unused personal capital allowances to potentially wipe out the gain and so no tax is payable.

However, if the probate value was £122k, there isn't any gain and isn't any tax.

[mariner2]

Thanks Barmaid, this sounds like good news - so we don't get taxed on the whole 122k? (if it sells for that)
Sorry, this is not my field at all - not sure what probate is, and who the executors are. I believe we are at the stage of the solicitor sorting the collective value of the estate as it is not 2 months since our mother passed away.