Capital Gains Tax

[trolly61]

My parents recently died and their estate is to be equally divided between myself and my brother, its a very straightforward will. Everything is is the hands of the solicitors at the moment. We have been informed by the solicitor that if we sell the house now, we wont be capital gains tax. However if we transfer the deeds from our parents names into our names then sell the house we will be liable for CGT. Do we have to transfer the deeds into our names or can we leave them in our parents names? My brother lives abroad so is not a UK tax payer so I dont know if he will be liable for CGT. I want to keep the house to use for holidays but if it means I will have to pay 18% when we eventually sell it, I would rather sell it now. Is there any way to avoid CGT in this case? Could the deeds be transferred into my brothers sole name and then he can just give me the money or can I transfer my half to my daughter? My Dad paid so much tax all his life, pension, saving, income, it just kills me that I may have to give 18% of his hard earned money to the tax man. Any advice would be appreciated.

[dzug2]

If you leave it in your parents' names the estate will be liable for capital gains tax rather than you.

If you take it on for use as a holiday letting then yes you will be liable for CGT when you sell it. Remember it is tax on the GAIN - ie on the difference between the probate valuation and the amount it sells for, not on the whole selling price

[Jcltroop]

As far as I am aware, there is no CGT on death, but you might have issues with Inheritance Tax. Assuming that your parents did not make any other gifts from their will, or made any significant payment from their estate within the last 7 years, there should be £650,000 (£325k x 2) available to take from the estate without paying any IHT (Amounts over that are taxed at 40%)
This is only intended as a guideline, and you should obviously seek professional advice on these matters. All the best!

[ubasses]

On the date of the death the estate would have been valued and you would have each inherited 50% of the total value including the house. If you sell it now you will not have made any gain and there will be no tax to pay, if you decide to hold on to it CGT will be payable on the increase in value since the date of valuation. The date of the actual transfer of the name on the deeds makes no difference. On renting it out the income less allowed costs will be taxed as income. Your brothers situation will depend on his registered place of domicile and tax regulations relating to that.