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Will I Just Pay CGT on Market Value If I Sell an Inherited Property?

Question

My husband plans to leave me a BTL property that he owns on his death, which is at present rented by my son.  He paid £40,000 for it and the market value is now approximately £120,000.  He has been advised that if I live in it there will not be any CGT to pay.  My concern is what will then be the CGT liability upon my death?  I have been advised that if I sell the property straight away I will only pay CGT on market value less value at time of bequeathment.  Is this right?

Arthur Weller Replies

When your husband dies and you inherit the property from him then its value at the time of death (probate value) will be your base cost for any subsequent sale by you of the property. There is no CGT on death. So if you keep the property until you die, those who inherit from you will pay no CGT, although they may need to pay inheritance tax. As far as CGT is concerned, therefore, there is no necessity for you to sell the property.


Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

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