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Posted Wed, 04 Aug 2021 15:54:46 GMT by Soniar Ryan
We sold our mothers house in London a year after she went into a care home (only family stayed in the house during that time) - using our power of Attorney (my mother has advanced dementia). Will that money be counted as her savings/ estate upon her death, or can the proceeds be taken into account for the Nil Rate Band?
Posted Mon, 09 Aug 2021 13:26:43 GMT by HMRC Admin 24
Hi,

You would need to contact our deceased estates team to see what is included in her estate upon death. In general however, the sale of a property will be subject to Capital Gains Tax.

However, if this was the main property for an indivudal, they will be entitled to private residence relief for the period of time lived in.

Please see here for further guidance which also outlines rules for when someone goes into a care home, under the section for period of ownership.

Private Residence Relief (Self Assessment helpsheet HS283)

Thank you.
Posted Tue, 10 Aug 2021 10:40:40 GMT by Gary Coombs
I am just looking at the Inheritance Tax Rules to try to help a friend deal with them and find the IHT206 guidance notes about how to fill in the IHT205 IHT report (return), very helpful to understand what has to be counted and where to enter it on forms. Perhaps that would help you, or at least help inform any further discussions with HMRC but on first principles it would seem that once the house is sold and the CGT dealt with as noted by HMRC, then there is a cash sum (in a bank account) in your mother's estate that would be dealt with in the same way as any other cash sum she may have. But, you may still want to talk with the team HMRC indicate...

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