Capital Gains on inheritance

[Chelley]

Hi,
I was hoping someone would know the answer to this question. My husband and his sister inherited a house from their mother which we are now in the process of selling. The house was valued at 400k but has sold for 500 so there's capital gains due on the 100k. My question is, this house has been our principal residence for more than 10 years. Will this exempt us from the Capital Gains on our half of the sale proceeds?

thanks in advance

 

[ClubMan]

My husband and his sister inherited a house from their mother which we are now in the process of selling.

...

this house has been our principal residence for more than 10 years. Will this exempt us from the Capital Gains on our half of the sale proceeds?

I presume you mean that you and your husband have been living there? In which case this may be relevant:

Qualifying conditions for inheritance on, or after, 25 December 2016

This page provides information regarding the inheritance of a dwelling house on, or after, 25 December 2016

www.revenue.ie

Edit: just after posting this, the link started giving an error 403 Forbidden - access is denied. I'll leave it for now there on the assumption that this is a transient issue at the Revenue server end and the link will resume working ok in time...

 

[Chelley]

I presume you mean that you and your husband have been living there? In which case this may be relevant:

Qualifying conditions for inheritance on, or after, 25 December 2016

This page provides information regarding the inheritance of a dwelling house on, or after, 25 December 2016

www.revenue.ie

Edit: just after posting this, the link started giving an error 403 - access denied. I'll leave it for now there on the assumption that this is a transient issue at the Revenue server end and the link will resume working ok in time...

Yes my husband and I live here with our children. My SIL lives in the UK. The link did work for me, thanks a million for passing it on. So am i right in my understanding of those conditions, that as we are selling the house within two years of his mother's death, we will not be exempt from paying tax on the sale?

 

[AAAContributor]

If I understand your situation correctly -

Your husband inherited a 50% share in a property from his mother.

The property was valued at €400,000 for inheritance tax purposes.

Your husband has lived in the property since the inheritance (and before that - but not relevant for capital gains tax as he only acquired the interest in the property on the death of his mother).

The property has sold for €500,000 realising a gain of €100,000.

Your husband's share of the gain for tax purposes is 50% - €50,000.

Are there are any reliefs for this gain? There is:

Principal Private Residence (PPR) Relief

This is an explanation of what relief on cgt is available for a Principal Private Residence (PPR)

www.revenue.ie

Your husband should be able to avail of Principal Private Residence Relief against his share of the gain and therefore should have no chargeable gain for capital gains tax.

 

[Chelley]

If I understand your situation correctly -

Your husband inherited a 50% share in a property from his mother.

The property was valued at €400,000 for inheritance tax purposes.

Your husband has lived in the property since the inheritance (and before that - but not relevant for capital gains tax as he only acquired the interest in the property on the death of his mother).

The property has sold for €500,000 realising a gain of €100,000.

Your husband's share of the gain for tax purposes is 50% - €50,000.

Are there are any reliefs for this gain? There is:

Principal Private Residence (PPR) Relief

This is an explanation of what relief on cgt is available for a Principal Private Residence (PPR)

www.revenue.ie

Your husband should be able to avail of Principal Private Residence Relief against his share of the gain and therefore should have no chargeable gain for capital gains tax.

amazing, thanks a million