This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

CGT when transferring property from an estate

tigerspill
Posts:3
Joined:Sat Jan 08, 2022 1:45 pm
CGT when transferring property from an estate

Postby tigerspill » Wed Apr 13, 2022 12:17 pm

Hi,

I am hoping that someone can help me with my query.

We have inherited some property (non-residential) from my parents. There was no IHT to pay.

The land was obviously valued for probate. Some of the land was sold from within the estate for more than the probate value and hence was liable to CGT from within the estate.

However, some of the land has passed to us as benefactors of the estate. We have immediately sold this land for more than the probate valuation, therefore CGT must be paid somewhere.

My question is where does the CGT liability(s) lie and how is it calculated?

I think there may be two options -
Do we (benefactors) calculate the gain of sale price over the probate valuation and we each pay personal CGT on this gain on our SA108 forms?
Or do we need a new valuation for the date the land was transferred from the estate to us; And the estate pays CGT on this new valuation less probate valuation; and that we pay personal CGT on the sale price less this new valuation?

Thanks

maths
Posts:8448
Joined:Wed Aug 06, 2008 3:25 pm

Re: CGT when transferring property from an estate

Postby maths » Thu Apr 14, 2022 4:15 pm

Do we (benefactors) calculate the gain of sale price over the probate valuation and we each pay personal CGT on this gain on our SA108 forms?

Yes. However, as there was no IHT to pay on the estate the base cost to you of the property for CGT purposes is market value at date of death which may or may not equal its probate value (PV) although if the PV was calculated by a qualified professional then the two values should basically be the same. Any CGT charge is that of you as vendor.
You also need to file a CGT return within 60 days of "completion" (where completion date on or after 27 October 2021; 30 days for earlier completion).


Or do we need a new valuation for the date the land was transferred from the estate to us; And the estate pays CGT on this new valuation less probate valuation; and that we pay personal CGT on the sale price less this new valuation?

No.

tigerspill
Posts:3
Joined:Sat Jan 08, 2022 1:45 pm

Re: CGT when transferring property from an estate

Postby tigerspill » Fri Apr 15, 2022 11:29 am

Do we (benefactors) calculate the gain of sale price over the probate valuation and we each pay personal CGT on this gain on our SA108 forms?

Yes. However, as there was no IHT to pay on the estate the base cost to you of the property for CGT purposes is market value at date of death which may or may not equal its probate value (PV) although if the PV was calculated by a qualified professional then the two values should basically be the same. Any CGT charge is that of you as vendor.
You also need to file a CGT return within 60 days of "completion" (where completion date on or after 27 October 2021; 30 days for earlier completion).


Or do we need a new valuation for the date the land was transferred from the estate to us; And the estate pays CGT on this new valuation less probate valuation; and that we pay personal CGT on the sale price less this new valuation?

No.
Thank you for this.

The probate valuation was carried out by a local agent so I think that would be deemed a formal/professional valuation. So I am assuming that this will be fine for CGT purposes?

Does the 60 day registration for CGT apply to non-residential property?

maths
Posts:8448
Joined:Wed Aug 06, 2008 3:25 pm

Re: CGT when transferring property from an estate

Postby maths » Fri Apr 15, 2022 6:55 pm

Apologies. Overlooked the non-residential element in your post. 60 day deadline does not apply to non-residential property.


Return to “Capital Gains Tax, CGT”