CGT.Inherited 1982 and 2001 Shares in house.Bought out brother 2019 Now selling. PRR 8yrs

Inherited 1/3 share house which had a sitting tenant on Mothers death in February 1982 . Probate value £7000 Inherited a further 1/6th share on my sister’s death in February 2001. Probate value £42000 Vacant possession of house on 29th May 2015. Instructed builders and works began 6th August 2015 to replace bathroom and Kitchen with modern units. On completion of works I moved into the inherited property as my only residence 13th May 2016 and have lived there to date. 20th June 2016 previous home listed for sale continually until finally sold 17th December 2019 No capital gains tax was due as total gain was only £2452 I purchased my brother’s 50% share of the house at 50% of full market value of £375000. (ie £187,500 )on 17thDecember 2019. Please could you advise how to calculate the Capital Gains tax due on imminent sale at £457,500 and which value to state at 'date became owner' as I acquired different shares at different times. Thank you. I would really appreciate your advice to ensure the correct amount due.

Hi ,
 

You will need to take each portion at the value at the time you got it so 1/3 of the 7k, 1/6 of the 42k and then your final purchase of 187500. The date you became owner will be when you got he first share . Thank you .

Thank you. Please clarify. After the two inheritances I owned 50% of the house which is subject to CGT as it was a second home. (cost at ownership using your calculations 9333) CGT due on 50% of selling price. Since May 2015 I have lived in the house and it has been my only residence. The 50% share I purchased at £185000 when I was already living in the house as my only residence is presumably not subject to CGT from that date forward ? My brother has fully paid the CGT on the proceeds of the 50% share which he sold to me.

Hi
You still take into account the 185k for your purchase price but your gain is still based on any increase overall. You can then claim private residence relief for the period you lived in the property.

Since I bought the remaining 50% share in the house and it was my only or main residence throughout the entire period of ownership of that 50% should I not be able to claim full PPR relief for that 50% ? I fully appreciate CGT is due on the total percentages that I owned since my mothers and sisters deaths and is calculated from the first probate date. Presumably PRR is applicable to the inherited shares and full PPR relief on the purchased share. Thank you for your kind advice.

Hi,
PRR is applicable on the period you lived in the property on the total gain.
As you paid 185k for the other 50% share this is still part of your original purchase price that is deducted when working out the gain.
Thank you.

Thank you so much for clarifying this

1. Please clarify if probate valuations at dates of the deaths of my mother and sister would be calculated as the vacant possession values or the value of the property with the sitting tenant 2. When I bought my brothers 50% share in the property in 2019 , it was my only property as I had already sold my other home - so in this respect is he profit realised from the 50% share bought from him exempt from capital gains tax. 3. Is Capital gains therefore payable only on the shares I already owned since the deaths of my mother and sister Thank you for your kind advice as I would like to finalise my Capital Gains Tax submission

Hi ,
 

1. The probate value would be based on the value of the property irrespective of it being tennanted or vacant .    2. When your brother sold his share to you in 2019 this would have been subject to CGT at the time .    3. This depends on whether you actually lived in the property at any tme of ownership . Thank you .

Thank you. My brother paid CGT for all profits which he gained on the property when he sold his share to me. The property became vacant in 2015 and I moved permanently into the property in 2016 after works there were completed and having put my own house on the market My own house sold in 2019 and the property thus became my only property and remained as my permanent dwelling until it sold this October