Inheriting a property can provide you with a valuable asset and the chance of financial stability, however it also has various tax implications that you need to be aware of.
Capital gains tax is the tax on profit made from selling an asset that has gone up in value since you purchased it. The tax is only on the profit, not on the total asset value.
In most cases, capital gains tax is not owed when selling an inherited property. This is because the property is revalued at the market price on the date of the previous owner’s death.
This means that if beneficiaries inherit a house and sell it for a higher price than the original owner paid then there is typically no capital gains tax due.
When might capital gains tax be due if you inherit a property?
If the previous owner who passed away was a non-UK resident or had been living abroad then the capital gains tax liability might differ.
If the previous owner gifted the property into a trust less than seven years before passing away then capital gains tax might be due.
If you are considering gifting a property or putting it into trust then the tax rules and implications are complex. At Four Wealth Management, we can help explain these to you and decide if this is the right decision for you.
Book a no-obligation meeting online or call us on 0117 973 0500.
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Inheriting a property is a significant event that can bring both emotional and financial considerations. Understanding the implications of capital gains tax on the subsequent sale of the inherited property is crucial for effective financial planning. In most cases, beneficiaries find themselves exempt from capital gains tax. However, it’s important to be aware that there are exceptions.
At Four Wealth Management, we can help you to fully understand the tax rules and allowances before you make any decisions.
Book a no-obligation meeting online or call us on 0117 973 0500.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
Trusts are not regulated by the Financial Conduct Authority
