UK Capital gains tax foreign property sale

[nina36]

I would be grateful for any feedback on the following: I and my two adult children are UK residents and own a property in Italy we want to sell. We did not buy this property but inherited it from my father. We have received an offer equivalent to about £365,000.

We have agreed that the funds will go to me as I have no savings, no property in the UK (I rent a small flat) or income except for pension credit and attendance allowance. The property in Italy was not rented out and therefore generated no income. I was not able to live there myself as I depend on one of my children in the UK for care. My children are self-employed UK tax payers, currently not earning because of COVID, in receipt of SEISS grants. One has a low income and no property (and is also my live-in carer), the other earns more and owns a property, but as I said the plan was for the proceeds of this sale to go to me towards buying a property in the UK. Will I need to pay Capital Gains tax and if so roughly how much?

Many thanks

 

[Truemanbrown]

Obviously, a bit late.

Given that you are UK resident, you will pay Capital Gains Tax on the disposal of the property. You say that you inherited the property from your father. The cost of the property will be the probate value shown when the inheritance tax return was sent to HMRC.

Given that the property was in Italy, you may have to pay tax over in Italy on the sale.

Finally, dependent on the tax treaty between the UK and Italy, you may get double tax relief. This means that some or all of the tax you may pay in Italy will be netted off against the tax liability in the UK.