Bert asks: “To reduce CGT, do I need to register this property in my and my sister’s names before I sell it or can it be done by another method after the sale?”
Q&A 41 – CGT On Inherited Property – Shownotes
Today’s question comes from Bert:
I have taken your invitation to send a question from your website and would like to ask the following.
My late mother’s house was left to me and my sister in my mother’s will, probate has been granted and it now belongs to me and my sister and we are jointly in the process of selling it. We have a buyer and it is currently awaiting the sale going through.
To reduce CGT, do I need to register this property in my and my sisters’ names before I sell it or can it be done by another method after the sale?
Thanks for your question Bert.
The property value at the time of the probate will be used as part of the calculation for any potential inheritance tax on the overall estate left by your mother. This should have already been sorted as part of the probate, but it’s probably double checking to make sure this was dealt with appropriately.
As a result of this process, the property will now be in the name of you and your sister.
Capital Gains Tax
So, when you sell the property, that same property value from the probate will be used as your “purchase cost” and the sales price as your proceeds. You can then deduct any “associated selling costs” and your annual allowance from the profit:
If the time between probate being granted and the house sale was short (which is seems it is), it is unlikely that any capital gains tax would be due.
However, it’s worth running the numbers as per our article on How To Save Capital Gains Tax to make absolutely sure (especially if the property is an expensive property in a vibrant market, e.g. London and the South East).
I hope that answers your question Bert.
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