CGT calculation - inherited property

[fun_runner]

Can anyone kindly help me with a CGT question arising from the administration of late parent's estate (I am one of several executors and beneficiaries)?

The estate was subject to IHT (which has long since been cleared probate obtained etc and HMRC have issued a certificate). The property was not sold for some time after death as it was rented out for a while and we just did not do much initially about this. As a result it eventually sold for £35k more than the probate value. It was sold by the estate not the beneficaries (I think). It took two tax years to sell.

Date of death: in Tax year 16/17
Date of completion of sale Tax year 17/18
Capital Gain: £35,000
Less costs: about 2k

Less estate annual exemption for 16/17 £11,100
Less estate annual exemption for 17/18 £11,300

£10,600 x 28% = £2,900 approx CGT due.

Does this seem right and how do I acutally pay (I have tried looking on HMRC but this seems to be all about paying as a beneficary not as an estate, which I don't think applies here). I could do it through self-assessment but it wants to treat me as a beneficary with my own personal allowance and not an estate? Does anyone know how long I have to pay this also?

Thanks - these should be simple questions I know but I am not that clear.

[pawncob]

Execs only get a CGT allowance for the year of disposal, so gain is £35k less £2k less £11,300, taxable at 28%. had it been transferred in specie, each beneficiary could have used an annual allowance!

[fun_runner]

Thanks for that. I should have made the transfer, as you say, but the solicitor who dealt with the estate and sold the house did not advise this in time (or at all actually...).

That's why I was wondering about their calculations of the actual CGT liability too...having asked them to pay us compensation for this mistake....

Best wishes
Julia

[maths]

Once residue has been ascertained the beneficial interest in the estate property passes to the trustees from the executors. No written assent is necessary and can be implied by conduct.

The trustees then hold as bare trustees for the beneficiary; in which case a subsequent disposal is by the beneficiary not the executors.

The solicitor should know in what capacity the land was sold.

[fun_runner]

Maths,

Thanks. Obviously I rather like that suggestion. When you say "residue ascertained" I think this might be the case. My late mother's assets had all been collated, savings, pensions etc, any bills paid (including IHT), and her left over savings after this already distributed to the beneficiaries. There was enough funds in the estate to sort this out without having to sell the property. The only thing left in the estate was the house (and maybe a bit of rent paid in regularly from the tenant until they left). Probate had been obtained and the property had a chartered surveyors valuation at date of death, which was accepted by HMRC.

Is this what is meant by "residue ascertained"?

The executors and the beneficaries were identical (apart from a few very small payment to other minor beneficiaries, grandchildren, already paid out), so it seems reasonable to me to suggest we were happy to give the property (as executors) to ourselves (as beneficiaries) without doing anything formally, but technically I think it was sold by the estate.

It took about 20 months after death for the property to sell, the house was tenanted, the tenant was good and we did not ask them to leave straight away, and it just happened to be in one of those areas in the country seeing the biggest rise in prices last year hence the gain.

Is there any precedent for this though? I cannot find it HMRC manuals! I don't mean to dispute your view (I like it), but I am prepared to pay tax genuinely due.

Thanks again.

[maths]

Probably easiest for you is to read the following and the cross-referral mentioned.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem7360

[Julie1111]

I am in much the same boat except there is only one person that inherited and there is 7 years rental after death. That person received half the rent along with me as I owned half the house previously. I am therefore hoping that I can prove beneficial interest for the joint owner and get her an allowance of £11700 and also pay at 18% the same rate as me. If not it will be 28% for her and no allowance as far as I can see. The manuals are very confusing. I don't understand much of the "lingo" I am seeing a capital gains tax specialist over the next few weeks and if I get any information from them I will share here.