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Capital Gains Tax on jointly held inherited flat

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Wife sold a letting property in 2019-20 and now needs to calculate the CGT on it.

She jointly bought this house with husband 20 years ago and inherited the remaining 50% on his death a couple of years ago.

When calculating the gain on her tax return (in simple terms) would it be either:

1 - Sale proceeds less original purchase costs or;

2 - Sale proceeds less (50% of original cost + 50% of probate value).

thanks!

 

 

Replies (9)

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By Paul Crowley
19th Jan 2021 12:32

That is pretty much it, subject to improvements to property

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Replying to Paul Crowley:
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By Ph12345
19th Jan 2021 12:36

Thanks for replying

Do you think the correct calculation is option 1 or 2?

The gain is much less under option 2.

There were some improvements made in 2008 of around £10k

Thanks

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Replying to Ph12345:
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By Matrix
19th Jan 2021 12:42

Please can you remove the large text and colour in your question since it is hard to read.

I vote 2) and only use 50% of the improvements.

Are you her accountant?

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Replying to Matrix:
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By Ph12345
19th Jan 2021 12:52

thanks, I've tried to change font but not sure how.

not her accountant just a friend, can't get through to helpline so thought I'd try on here

I was leaning towards 2 but wanted to check

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Replying to Ph12345:
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By Paul Crowley
19th Jan 2021 12:52

Version 2
Wife got the 1/2 a couple of years ago

Agree, 1/2 improvements
the other half included in probate value

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By bernard michael
20th Jan 2021 09:10

Did she /or her husband ever live in the property ???

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Replying to bernard michael:
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By Ph12345
20th Jan 2021 09:16

No it was a holiday let

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By bernard michael
20th Jan 2021 09:27

I'm sure you've checked this but is it eligible to claim Entrepreneurs Relief ??

It's not answering your question but I thought I'd ask anyway

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Replying to bernard michael:
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By Ph12345
20th Jan 2021 10:35

Thanks
Yes I think that can claimed as it was a furnished holiday let and I believe individuals can use the relief ??

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