Capital Gains Tax on Inherited Property

[Davidm]

My wife and I will inherit mil's house on her death, her total estate
will be well below the IHT limit, so no inheritance tax to pay. I know
that we will be liable for CGT on any increase in value from the
probate vaulation to the final sale value (less selling costs and CGT
allowance).

It may be that estate agents will recommend some significant
improvements are made (complete new kitchen, rewiring, redecoration
etc) to increase it's value and make it easier to sell.

Can these improvement costs be offset against the CGT?

If not, it may be more cost effective just to sell the house, without
the improvements, at a lower price, I'll need to work out the
respective numbers.

 

[tim.....]

My wife and I will inherit mil's house on her death, her total estate
will be well below the IHT limit, so no inheritance tax to pay. I know
that we will be liable for CGT on any increase in value from the
probate vaulation to the final sale value (less selling costs and CGT
allowance).

It may be that estate agents will recommend some significant
improvements are made (complete new kitchen, rewiring, redecoration
etc) to increase it's value and make it easier to sell.

Can these improvement costs be offset against the CGT?

If not, it may be more cost effective just to sell the house, without
the improvements, at a lower price, I'll need to work out the
respective numbers.

all improvement costs can be offset against any gain made

tim

 

[RobertL]

all improvement costs can be offset against any gain made

AIUI: if you sell it within a reasonable time (1 year perhaps) you can getthe actual sale price used in a revised probate valuation and there will then be no CGT.

Also, when you have it valued for probate, make sure the valuer knows you would like as high a valuation as possible. There is always a certain leewayin these things and the valuer may well assume that you want a low valuation unless you explain the situation.

Robert



Robert