Tax on profit from house sale.

[johnnyedge]

An old friend of mine has been looking after an elderly chap for over 20 years, he used to run errands for him, take him shopping etc. the old chap has now died and left his house to my friend in his will. He plans to sell the house and use the cash for his retirement, how much tax will he have to pay on �180,000 assuming his tax code is about 500L and he earns about �15,000 a year from his normal job. I have tried to convince him to see an accountant, I think he thinks he can keep the lot if the tax man does not know about it. I can only assume the sale will be registered once it is complete and that the inland revenue will be notified. Can someone advise me so I can put him straight. Thanks. Johnny.

[Slingshot]

If he inherits the house and sells it immediately and it has not gone up in value there will be no Capital Gains Tax to pay. If it has gone up in value by �9,200 or less there will be no CGT to pay. All house sales are notified to the Revenue by the Land Registry immediately. Any Inheritance Tax will have been paid before he receives the house. A quick check with a local Independent Financial Advisor and or Accountant will not cost much, probably free for an initial consultation.

[dzug]

To add to slingshot's answer, once he has invested the �180K he will have to pay tax on the interest from it, but it will be deducted at source. He'll have no choice.

But there will be no tax on the bequest itself.