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Where Taxpayers and Advisers Meet

CGT on Inherited and split property

Trickycs1
Posts: 1
Joined: Mon Feb 24, 2020 5:26 pm

CGT on Inherited and split property

Postby Trickycs1 » Mon Feb 24, 2020 5:49 pm

I and my sibling have inherited a house from our mother and IHT has been paid on her estate. We intend to split the land into two separate building plots, apply for planning permission and sell the house and the two plots separately. How do we calculate the CGT liablity that falls to each of us ? and what happens if I sell the property and land over separate tax years ?

AGoodman
Posts: 1029
Joined: Fri May 16, 2014 3:47 pm

Re: CGT on Inherited and split property

Postby AGoodman » Tue Feb 25, 2020 11:05 am

The total base cost is the probate value of the land (i.e market value at your mother's death).

You then have to apportion that base cost between the two plots in proportion to their relative values (e.g. if they are equal value, they each get 50% of the base cost).

Gain is sale price - base cost - deductible expenses.


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