can anybody help re inheritance/capital gains tax

[lorri24601]

I inherited a flat from my grandmother 12 years ago,since then we have used it as a hoilday base for visiting family and in later years a rent free home for various family members as and when it has been needed, the rest of the time it has stood empty ,now as family has dwindled and moved away i am thinking about selling it ,i am retired and living with my husband on a basic state pension , does anyone know what tax or taxes would apply to this sale and would it come under inheritance tax or after a certain amount of years would it change to something like capital gains tax, we think the flat is valued at around 100k.

many thanks in advance

[Loosehead]

As it is not your main residence it will be liable to capital gains tax on the increase in value over the last 12 years. You can offset this with your annual CGT allowance and I believe that it is possible to use the allowance for acertain amount of previous years. Best see a tax accountant though and they'll give you chapter and verse. It's worth paying a small amount to an expert to save a large tax bill.

IHT does not come into it.

[lorri24601]

thank you thats a great help :-)

[themas]

To add to that, if you transfer a half interest in the property to your husband before selling it then you can reduce any capital gains tax liability because his annual CGT allowance would be available as well as yours.

You will need a valuation for the property at the date you inherited it (this should probably be whatever it was valued at for your grandmother's probate). You can deduct from the capital gain all the costs of selling, and any money you have spent on improvements.

But do see a tax accountant.