ChatterBank0 min ago
Capital Gains Tax
7 Answers
we have just sold my parents house for £145.000 and the proceeds are divided between myself and my brother do i need to pay tax we are both pensioners wit no capital are we liable for any tax any advice would be welcome
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What's happened to your parents?
Have they left you the house in their wills, having both now passed away, or have they merely given you their property and moved elsewhere?
The answer to that drives the liability question, though it isn't you that has the liability - it's your parents estates that may have a liability to IHT on their eventual deaths.
Have they left you the house in their wills, having both now passed away, or have they merely given you their property and moved elsewhere?
The answer to that drives the liability question, though it isn't you that has the liability - it's your parents estates that may have a liability to IHT on their eventual deaths.
Ah! so the house has been jointly owed by you and your brother for the last 13 years?
If you have been living in it for the whole of that time (so it is your and your brother's principal private residence) then no CGT to pay.
If you've been renting it out or empty, then you have a maximum potential CGT liability for the difference between the the value now (£145k) less the value at probate 13 years ago. However each of you gets an annual CGT 'allowance' that you can offset the liability (of about £10k for each of you).
What has happened in the intervening period from 13 years ago to now, involving the house?
If you have been living in it for the whole of that time (so it is your and your brother's principal private residence) then no CGT to pay.
If you've been renting it out or empty, then you have a maximum potential CGT liability for the difference between the the value now (£145k) less the value at probate 13 years ago. However each of you gets an annual CGT 'allowance' that you can offset the liability (of about £10k for each of you).
What has happened in the intervening period from 13 years ago to now, involving the house?
Yes, but you and your brother have a joint liability to CGT for any capital appreciation of the house (increase in value) in the last 13 years - what I said in my last reply.
The house will have had a probate value fixed for it 13 years ago. If this was less than £145K (what you have just sold it for), there is a potential liability for the difference.
However you can offset from this the cost any capital improvements you may have made (and which you haven't already offset in profits you made from renting it out). Also each of you have a CGT annual allowance of £10600 in the current tax year - which means you can each disregard this amount of 'profit' you made on the sale - assuming you don't have other capital gains in this current tax year.
You will need to complete a tax form for the 2012/13 tax year after the end of 5th April to disclose this transaction to HMRC.
The house will have had a probate value fixed for it 13 years ago. If this was less than £145K (what you have just sold it for), there is a potential liability for the difference.
However you can offset from this the cost any capital improvements you may have made (and which you haven't already offset in profits you made from renting it out). Also each of you have a CGT annual allowance of £10600 in the current tax year - which means you can each disregard this amount of 'profit' you made on the sale - assuming you don't have other capital gains in this current tax year.
You will need to complete a tax form for the 2012/13 tax year after the end of 5th April to disclose this transaction to HMRC.
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