CAPITAL GAINS TAX

[bob561941]

My wife was left a house by her late sister, The house was valued for probate at £325,000.00,if she sells the house for 340.000.000 will she have to pay capital gains tax if so how much ?

[New Judge]

There is a tax free allowance of £10,600 for Capital Gains, so she will be liable to pay tax on £4,400. The rate varies between 18% and 28% depending on her total income, so tax dur will be between £1908 and £2968.

[bob561941]

thanks new judge but 18% of£4,400 is £792 and 28% of 4,400 is £1,232

[anniebird]

Also you can deduct estate agents costs and solicitors fees before calculating the profit. Another way of eliminating the tax payable is for her to transfer half of the house to you before the sale so that you can both use your allowance.

[bob561941]

thankyou annie bird,if she sells the house for £325,000.00 will there be CGT to pay ?

[buildersmate]

There will be no CGT to pay if she sold at £325k - but don't try fiddling with the transaction to get part of a larger total payment in fixtures and fittings as HMRC will probably discover this.
I (like you) think that NJ made a slight mistake in his calculations - the amounts of tax to be paid are as you suggested - NJ forgot to deduct the annual CGT allowance before taking 18% and 28% respectively.

[New Judge]

Yes, sorry. Took 18% and 28% of the £10,600 allowance, not the taxable £4,400. It was a bit early in the morning for me to do such complex calculations! Thanks for the correction.

[dasherman]

You may find this link useful:
http://www.hmrc.gov.u...-when-you-inherit.htm

[atalanta]

If it is your only home, and you can prove you have actually lived in it, there should not be any tax to pay at all. If you do have two homes, see a solicitor or go to the Citizens Advice Bureau in the first instance.

[jedimistress]

A tax advisor would be more appropriate than a solicitor. But really the tax is such a little amount based on the gain, is it really worth it? I highly doubt there will be any CGT to pay after the costs of selling have been added to the equation.