Capital gains tax - sale of inherited property

stabilio

OK am getting conflicting advice from solicitor and accountant...
So I have to pay CGT on the gain due to the rising property market.... gain is 30K. The first 1270 is exempt, correct? My solicitor is saying that this annual exemption does not apply to Probate situations..... this is first I've heard of this???
Thanks

nompere

Executors don't get an exemption. Individuls do. So is it you as executor or you as beneficiary that is selling?

stabilio

nompere wrote: »

Executors don't get an exemption. Individuls do. So is it you as executor or you as beneficiary that is selling?

I'm a beneficiary. Not the executor.
Executor sold the house.

Apparently I am liable for the CGT. Executor isn't. This is what Revenue told me....

nompere

If the executor sold, then in principle, he, as executor, makes a return and pays the tax. Then he doesn't get an allowance.

If he sold it on your behalf then probably it's your sale, and you would get an allowance.

The solicitor and executor should know between them the basis on which it was sold.

stabilio

You would think so! (that they would know between them!).

Will just bequeaths 'whole of the estate' - equally between me and my sister. No other details as to the nature of the estate (which was house and a very small amount of cash). And nominates an executor.

Given that the solicitor has a copy of the will I am assuming she's made the right call as to who needs to make a return. I've submitted a TR1 on behalf of the estate....!

HardyBuckFan

Hi all, am reopening the thread as am hoping can help with the below query:
Child inherited property from parent in 2015.
Market value at date of inheritance €120,000 (valuers assessment).
Now selling for €200,000 (due to upturn in property market).
Is CGT at 33% due on the difference of €80k.
Any advice appreciated.
Thanks in advance

stabilio

HardyBuckFan wrote: »

Hi all, am reopening the thread as am hoping can help with the below query:
Child inherited property from parent in 2015.
Market value at date of inheritance €120,000 (valuers assessment).
Now selling for €200,000 (due to upturn in property market).
Is CGT at 33% due on the difference of €80k.
Any advice appreciated.
Thanks in advance

Unfortunately yes. You can offset any costs related to sale of the property (estate agent fees, solicitor fees etc).

HardyBuckFan

Thanks for the reply, that's what I thought, but was hoping there would be a way around it, bummer!

Geuze

HardyBuckFan wrote: »

Hi all, am reopening the thread as am hoping can help with the below query:
Child inherited property from parent in 2015.
Market value at date of inheritance €120,000 (valuers assessment).
Now selling for €200,000 (due to upturn in property market).
Is CGT at 33% due on the difference of €80k.
Any advice appreciated.
Thanks in advance

If the child lived in the house, and it is their PPR, then no CGT on sale.

Slasher

Geuze wrote: »

If the child lived in the house, and it is their PPR, then no CGT on sale.

The main rules are:

1. The property is the main or only home of the person who has died;

2. The recipient owns no other property at that point, and;

3. Critically, that the recipient has been living with the homeowner for three years before they die.

4. They must also hold on to the property for six years after availing of the relief, or use any money from its sale to buy another property.

Alan_007_

Slasher wrote: »

The main rules are:

1. The property is the main or only home of the person who has died;

2. The recipient owns no other property at that point, and;

3. Critically, that the recipient has been living with the homeowner for three years before they die.

4. They must also hold on to the property for six years after availing of the relief, or use any money from its sale to buy another property.

That's true for the dwelling house relief from CAT, but I think he was referring to PPR relief from CGT.

HardyBuckFan

Thanks for the reply guys.
Child didn't live in the property so PPR is a non runner.
Looks like we're stuck with the 33% tax bill unless some good news comes in the budget!

sellinggaff

Hi, bumping this as I have a similar query and I'm utterly stumped.

I inherited my mam's house last summer. I was both the executor and the only inheritor (only child).

For probate, I inherited

• 105 cash in her bank
• one house. A solicitor I consulted advised me to have my estate agent deliberately over value the house on the probate report- he explained that if the EA honestly thought it was worth say, 200k, but I managed to sell the house for 230K, I would have to pay tax on the 30K underestimate.

Probate, with house overvalued, came in in May 2022 at 330k- 225k house, 105k cash in bank. Just under the 335 or whatever where I would have to pay inheritance tax.

Currently selling the house. At the time of probate valuation (March) the EA thought (honestly, not over value for probate) 190k in its current condition, 225 if we did major renovations. He put down 225k on the probate valuation. I gave it a lick of paint and some new carpet, when it was time to go on the market he said we would chance our arm and put it up at 240K. Nobody bit for 2 months, so we put it down to 205k, a few offers started coming in and we have settled on 195K (which is roughly what I thought the house would be worth from the start going off sale prices for similar homes in the area, but I guess EA always hopes some eejit will bite the mad price).

I am absolutely stumped now as to whether, minus fees, I keep this 195k in its entirety or I am liable for tax. I had believed the only way I would be liable for tax would be if the house managed to sell at a price that would bring my inheritance over 335K (e.g house sells for 240k, so I would have to pay 33% tax on the amount that brought me over the 335k threshold)

If I am liable for tax, is it taxed at the source or do I get all the cash in my bank and contact revenue to resolve at a later period?

Also, my solicitors forms are asking whether I was resident in the property prior to sale. Stumped whether how I answer this will have an affect on taxes. I didn't live there for 20 years, is this relevant?

TLDR version-

Total estate inherited according to Probate- house valued at 225k, 105k cash. 330k inherited.

Selling price I am getting for house- 195k, so actual amount inherited would be 300k.

Am I liable to pay tax, and if so how much and is it deducted upon payment or do I settle with Revenue myself.

If I am liable, I'd sooner put Revenue on the long finfer, buy myself a house. and deal with them later.

TIA.

Geuze

You have made a capital loss on the sale.

Value at inheritance / acquisition = 225k

Sold for 195k.

Capital loss = 30k.

No CGT to pay, as there is no gain.

(this is all based on nobody questioning the 225k valuation)