Help needed requiring taxation on house sales

[Dead-Eyed Duck]

My wife and I have a half value of a house in a will. The value of the house is c.£140,000 and the other beneficiary is desperate for the money and has asked us if we want to purchase the house so that he can obtain the funds asap.

 

Fortunately we are in a position to do this, but we would only do this with a view to selling the house within 6 months maximum.

 

If we were to do this then I am pretty sure that there would be tax implications on any possible profit - does anyone have any experience of this?

 

Thank you for any replies

[TIGHTCHOKE]

I would think Davyo is your man.

[JohnfromUK]

Don't take this as 'gospel' but I understand the position is as follows;

 

On the half you already owned - you would (potentially) pay Capital Gains Tax (CGT) on any increase in value (of that half) between when you inherited and when you sell.

On the half you may buy - you would (potentially) pay CGT on any increase in value (of that half) between when you buy and when you sell.

 

Note that if it is your 'dwelling house' CGT would not normally apply.

 

I say 'potentially' because there is an annual exemption (currently £11300) of gain (total CGT gains in the year) you are allowed to make before tax cuts in - and depending on how the property is owned you may be able to use both yours and your wife's allowances. I'm not sure on that, and one or both of you may already have used all or part of your annual allowances. The tax is currently 20% or 28% of the gain depending on your income tax bands.

 

You would also of course be subject to any stamp duty etc.

 

My advice would be to seek professional advice from a solicitor or accountant as personal circumstances can make tax situations very 'individual' as can be seen from the above.

Edited November 4, 2017 by JohnfromUK