Cgt calculation query

Regarding sale after one Tennant in common dies

Didn't find your answer?

First time I've have come across this situation, and wondered if someone can tell me whether I am right or not with the cgt treatment of a 2nd property. 

I am quite confident in calculating cgt but have never had to do it based on this senario before. 

Client was left a property in a will and became a tenant in common with another person.

Some years later the other party died and the whole property became owned soley by my client. 

She is now in the proceeds of sale, and my query is the tax charge. 

I assume the tax charge would be 50% of the total cgt due during the tenants in common period and 100% during sole ownership?

I'm also assuming that the calculation should be done over the whole period and then apportioned based on the period where she was a tenant in common? 

Any pointers would be apteciated. 

Replies (3)

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By JB101
19th Jul 2023 16:01

Cost = initial probate value for the 50%
Enhancements (cost) = market value of the second half at the date the second person died.
Once the gain is worked out, look at any reliefs available in the usual way.

Thanks (1)
By Hazel Accounts
20th Jul 2023 12:25

Your client is liable for the whole gain, but it the base cost that is adjusted.

The "cost" will be 50% of value for probate when originally aquired plus the value of remaining 50% when that was aquired at the second death (presumably this will be more to reflect growth of the other persons share).

Thanks (1)
Replying to Hazel Accounts:
By SXGuy
20th Jul 2023 12:38

Thank you I understand now. Much appreciated.

Thanks (1)