Tax costs of selling inherited house ?

OK, not purely a legal question, but there isn't a uk.tax group...
Anyone give me a pointer here Ive read the info on some websites but Im unsure how this works !
Ive just inherited my parents house, total value well under the inheritance tax threshold of 265k.
Ive owned half of it for 5 years as my father left me his half when he passed away and he and my mother held it as tenants in common.
Weve selling it (purely by chance) at the same amount as the probate value, so I understand that theyll be no capital gains tax ?
From what Ive read I think I have to ignore half the value (as Ive owned it for a while), but Im not sure how the other half works for tax ?
Probate was granted mid Jan this year and Im the only beneficiary.
Total selling price is going to 113,000, less fees of 3,000ish, so 110,000.
So, do I just declare 55,000 ? if so, dose that means I lose 40% to tax !! Are there any work rounds ?
Any sites any where with more info on this ?
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wrote:

Crossposted to uk.finance
No IHT or CGT due.
http://www.hmrc.gov.uk/pensioners/capitalgainstax.htm http://www.hmrc.gov.uk/cto/iht.htm
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Why do you say no CGT due? He has owned half of the house - which is not his own residence - for five years. It has presumably risen in value since then. Why does he not have to pay CGT on the increase in value of that half?
--
PeteM

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Sorry, yes, my mistake.
Daytona
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PeteM wrote:

To be fair, the OP didn't actually say whether or not he has been living with his parents. If he's been living in the house of which he owned half, there will be no CGT due. If he didn't, there will be (if there has been enough gain).
He didn't say how much probate value was 5 years ago, so we don't know how much gain there has been. But we could guess:
Suppose it went up in value at 10%pa[*] for 5 years. That would make probate value 5 years ago £70k[*], so half gain (less half of selling costs) would be £20k. Less taper relief of 15% -> £17k. Less ca £9k CGT allowance -> £8k. CGT due would be between 20% and 40% of that, depending on what his income is.
There is a loss on the second half which could mitigate the CGT bill. He said the selling price is the same as probate value, but of course the selling costs introduce a loss. This would bring the £8k down to £6500 (half the selling costs are already allowed for in the £8k, it is the other half which creates a loss to reduce the £8k to £6k5), and so the CGT bill could be as low as £1300. So Daytona was almost right, "no CGT due, to speak of". :-)
--
[*] If 10% is an overestimate, then £70k is an underestimate and the
actual taxable gain will be less.
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Surely there is CGT on any gain on the half he has held for the last 5 years?
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Well, that's an interesting question... 5 years ago the place was in a fair condition. now it's not, it's not a slum or falling down, but mum didn't bother much after my father passed. So now it's needs new double glazing, central heating (which it currently dosen't have at all), rewiring and new kitchen and bathroom. The selling price on the street for a house thats up together is 145k to 155k. If we're working on 10% a year it's being sold now for 'about' what it was worth then.... But I would imagine that the revenue has it's own way of working out these things ?
Steve
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Steve wrote:

What was probate value 5 years ago? That's the key.
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There was no probate 5 years ago. The solicitor acting then said it wasn't needed
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Steve wrote:

How can you have inherited your father's half of the house without probate? Are you sure you actually did inherit it then? Were the house deeds amended to show you as the new in-common co-owner?
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Deeds were amended about 4 weeks after his death, I have have the deeds and they have been amended.
The solicitor advised that probate wasn't needed as his will only had two bequests, his half of the house to me (with the proviso that my mother was to live there for as long as she wanted) and everything else to her.
I have a feeling that it was all done with 'letters of administration' ? I'm sure all the paper work from then is still there somewhere, but finding it.. I've found every bill, invoice and letter they ever received going back to the 50's.
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To be sure that you don't pay more tax than needed you really need to get paid for professional advice. In your case it should not be more than a few hundred pounds and you will probably save that much. What has to be done is to establish the open market value at the date of your father's death as a starting point.
Peter Crosland
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wrote:

That would be the case if there was no will - <URL:http://www.hmcourts-service.gov.uk/cms/1216.htm
Wills can be located here - <URL:http://www.hmcourts-service.gov.uk/cms/1176.htm
Daytona
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