Avoiding cgt through inheritance.


T

tonyjeffs

Sorry for asking this again - I thought I understood the answer a few
years ago, but realise I don't... And I apologise for not replying to
RR in 2005. I don't know how I made that error.


For privacy, this is simplified with made up figures:-


I don't have to pay any CGT this year.
If I sell our investment house, which I bought for around 30, and is
now worth 120, I'll have to pay CGT based on the profit I make from
the sale.

I am below the IHT limit.
If instead, I leave the investment house in my will to my
daughter, ...and I die before April 09, I thought the CGT issue would
disappear, since I haven't sold the house and therefore am not liable.
And I assumed that since she acquired the house when it's value was
120, and wouldn't make a profit if she sells it at that price she
wouldn't be liable for CGT either.
Is that right, or would the bequest somehow count as a sale for profit
to my daughter making my estate liable for CGTt?
How does death and inheritance rather than sale for profit affect CGT?

Hope that makes sense.

Thanks agian
Tony
 
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R

robgraham

tonyjeffs said:
Sorry for asking this again - I thought I understood the answer a few
years ago, but realise I don't... And I apologise for not replying to
RR in 2005. I don't know how I made that error.


For privacy, this is simplified with made up figures:-


I don't have to pay any CGT this year.
If I sell our investment house, which I bought for around 30, and is
now worth 120, I'll have to pay CGT based on the profit I make from
the sale.

I am below the IHT limit.
If instead, I leave the investment house in my will to my
daughter, ...and I die before April 09, I thought the CGT issue would
disappear, since I haven't sold the house and therefore am not liable.
And I assumed that since she acquired the house when it's value was
120, and wouldn't make a profit if she sells it at that price she
wouldn't be liable for CGT either.
Is that right, or would the bequest somehow count as a sale for profit
to my daughter making my estate liable for CGTt?
How does death and inheritance rather than sale for profit affect CGT?

Hope that makes sense.

Thanks agian
Tony
There is no CGT payable on death. The IHT rules would come into play.

Rob Graham
 
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T

tonyjeffs

There is no CGT payable on death. The IHT rules would come into play.

Rob Graham- Hide quoted text -

- Show quoted text -
Thanks Rob
No urgency to sell, so it looks like inheritance is the way to go.
The tax savings will go some very small way to offsetting the
predominant decline in house prices!

Tony
 

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