date of acquisition of property for CGT if inherited from 2 owners

My questions below are about 1) the date of acquisition for a jointly owned property in Hong Kong inherited from my parents; and 2) if surveyor is required for CGT purposes. Background of individual: Arrived UK in September 2021 and should be a UK resident for CGT tax purposes since then. Background of foreign property for disposal: One-third of the property was inherited from my parents (both are non-UK domicile non UK residents) and each of parent 1 and parent 2 used to own 50% of the property. The property was part of my parents’ estate of which the remaining 2/3 were inherited by my 2 siblings. In assessing the cost of disposal for CGT purpose, as stated in HMRC's website “This is the value of the property on the date the previous owner died”. I am not sure which date should be used. As parent 1 died on 2001/4/X leaving estate (including 50% of the property) under a will to parent 2 and parent 2 subsequently died on 2004/10/X leaving estate (including 100% of the said property strictly speaking) under a will to 3 children ie me and my 2 siblings. However, when parent 2 died, parent 1’s Letters of Administration with the Will Annexed (‘probate’) was still in process. Our local inheritance lawyer advised that we had to complete parent 2’s probate first. As a result, parent 2’s probate was cleared on 2006/12/X and the schedule of property attached clearing estate duty included 50% of the property. Then parent 1’s probate can be processed and was cleared on 2019/11/X and included the remaining 50% of the property. So I suppose the date that we legally inherited the whole property should be 2019/11/X. Please also note that, following the issue of parent 1’s probate, the two probates of parent 1 and parent 2 were registered on the Land Register of the Land Registry in Hong Kong on 2020/4/X with official change of title of the property in May 2020 under the capacity of tenant in common (1/3 each for myself and my 2 siblings). So when answering “the value of the property on the date the previous owner died.” for CGT, I should refer to the date of issue of parent 1’s probate i.e.2019/11/X. Is it correct? Also, in evaluating the value of the property, can I take transactions of similar properties from estate agents in the market as reference, or a proper surveyor for evaluation is required?

Hi P Du,
UK Capital Gains Tax rules allow for the transfer of assets between husband and wife and civil partners to be free of Capital Gains Tax.
You inherited your 1/3 of the property when parent 2 died.
For capital gains purposes, you would obtain the market value of the property at the time you inherited it and using the exchange rate at that time, convert the value to pounds sterling.
You can then work out 1/3, to get your inherited value.
Using the official exchange rate in use at the time of disposal, convert the disposal value and disposal costs into pounds sterling and work out 1/3, to get the disposal value and costs.
Subtract the inherited value and disposal costs from the disposal value to work out the gain.
As long as all of the figures are in pounds sterling, you can use the calculator at to work out the gain.
Tax when you sell your home
The gain should be reported in a Self Assessment Tax Return.
There are 3 official exchange rates at:
Exchange rates from HMRC in CSV and XML format 
You can choose which of them to use.
Thank you. 
 

In response to your reply, I would like to further clarify which date's market value of the property should I use as the time of inheritance? As I understand from other CGT cases of HMRC, date of probate is being used. For my case, legally speaking, the inheritance of the whole property was only validated upon issue of probates of both parent 1 and parent 2 and since the probate of parent 1 came at a later time, thus the date of issue of parent 1’s probate i.e.2019/11/X should be used. Kindly confirm/clarify my understanding. Thanks.

Hi,

If you own 100% of the property and it was inherited at 50% from parent 1 and 50% from parent 2 at a later date.  In this case there would be 2 calculations.

The 50% market value on the probate should be used for capital gains purposes for parent 1 and 50% of the market value on the probate for parent 2.  Add both together to work out the

inherited value for capital gains purposes.  You can show the show the date of each probate, as part of your calculation to work out the inherited value.

Thank you.