Councils using ‘Intelligence’ to track down low EPC properties and fine £5,00015:08 PM, 29th March 2021
About 2 weeks ago 36
Inheriting a property means making some important decisions that have lifestyle, tax and other financial consequences.
Property, or a share in a property, is inherited in three ways:
Regardless of the ownership structure and who inherits, the value is considered within the deceased’s estate for inheritance tax (IHT).
Once a property is inherited, any disposal – sale, gift or transfer of ownership – is subject to capital gains tax (CGT).
CGT is calculated on the difference between the property’s value on the date inherited and the value, less certain expenses, on the date of disposal.
Selling a property soon after inheritance should not incur CGT unless the property price significantly increases in a short space of time.
If the property is sold at a loss – for example the date of death value is higher than the sale value – then the owner can apply for a refund of any overpaid inheritance tax. Time limits and conditions apply to this, so take advice from a solicitor or accountant.
Anyone who inherits needs to decide whether to keep or sell the property.
Moving in to a property as a main home gives the owner the same tax reliefs as living in any other home.
Any mortgage payments on an inherited property are the responsibility of the new owner, even if they have a home of their own somewhere else – and like any other secured lending, failing to make these payments can lead to repossession.
Letting properties with tenants also need attention, as the new landlord will have legal obligations for the health and safety of any tenants.
Rental property owners have to declare their income to HM Revenue and Customs – if ownership is shared, each person is responsible for making a tax return for their split of the profits or loss.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.