Q&A Is there a Capital Gains Tax liability on inherited property?

Q:        I have inherited a house from an aunt who died last year. For various reasons it is taking some time to sort out her estate, but once probate has been granted, I would like to sell the house. However, as it is now worth considerably more than when it was valued for probate, my question is, even though I did not purchase the house, will I have to pay Capital Gains Tax when I sell it?

A:        When a beneficiary inherits a property under a Will, they are deemed to have inherited at ‘probate value’, meaning in accordance with the date of death valuation. There is a clear tax benefit to the beneficiary in this because they are not deemed to have inherited at the purchase value which could be significantly lower if the property was bought many years ago, or if a lot of renovation work was carried out at the property.

The gain as far as CGT is concerned is calculated on the gain made from date of death until date of sale.

An estate has its own CGT allowance which it can use against any gains. In relation to gains, you may deduct estate agents’, surveyors’ or valuers’, and solicitors’ fees, as well as advertising costs and any home improvement costs.

The CGT allowance for an estate is half of a single person’s allowance, therefore you may wish to discuss transferring the property into your own name first and selling using your personal CGT allowance for the year, provided you haven’t already used it.

You will have 60 days from the sale completion date to make the CGT payment, therefore it is really important to have made the right decisions prior to the sale and ensure that you have taken the appropriate tax advice anticipating the sale so that you can pay the correct amount of tax within this deadline. To ensure you get it right you should seek further legal advice.

This question has been answered by Ulia Choudhry, a Solicitor with GHP Legal.  If you would like to speak to someone about this or any other legal matter, please visit our website www.ghplegal.com and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194 

Ulia Choudhry

Ulia Choudhry


Ulia is a Partner who specialises in Probate, Wills, Trusts and Tax and is based in Wrexham