CGT on sale of inherited House

K

karltimber

Registered User
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94
Hi,
My parents house was sold recently, which sold for 100,000 over the market value.
That is divided between 5 of us siblings.

Is it as simple as cgt bill of 20K each = 20000 - 1270 allowance = 18730 * 33% = 6180 bill each ?

We haven't live in the house for years.

Any other items to look into for this CGT ?

Thanks
K
 
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First of all, it didn't sell for 100,000 over the market value. The market value was whatever it sold for

If it was sold by the executor or administrator, then the estate, not the beneficiaries, is liable for any CGT on the gain over the probate valuation. The estate has no personal relief of 1,270
 
Unless there has been a long delay between the date of inheritance and the date of sale, and/or there was some other factor such as a bidding war that pushed up the amount it realised on sale, I'd be posing serious questions about the integrity of the valuation used at probate, particularly if it has caused an otherwise avoidable increase in the overall tax exposure.
 
Yes - terminology is incorrect JPD
So, it's up to the executor and not the individuals to complete the CGT on the sale. But can each sibling complete their own CGT return for this - without the allowance ?

TMcG - will ask that question. thx
 
Whoever owns the property has a CGT liability

Has the estate been distributed?

If not, then the estate/executor is liable for the CGT

The siblings may be liable for extra CAT if the value distributed is above the valuation in the probate submission. A revised submission will be required
 
jpd said:
Whoever owns the property has a CGT liability

Has the estate been distributed?

If not, then the estate/executor is liable for the CGT

The siblings may be liable for extra CAT if the value distributed is above the valuation in the probate submission. A revised submission will be required
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Jpd - as the beneficiaries make up the estate,they would get a lower value inheritance as the tax would need too be settled first.
 
If the executor submits a revised probate submission, then there would be no CGT
 
How does one submit a revised probate submission? I think my parents house was undervalued a year ago for probate. An amount was entered, but estate agent did advise that it could go for more with competitive bidding.

Is it possible to revise up a value if the current sale achieves more? We would still be recording an increase, but I think at least 50% of the increase in price achieved could represent an undervaluation a year ago. Inherited house valued at 500k a year ago for probate, estate agent indicated it could go for more. House now valued at 550k and looks like we might actually achieve 650k with 4 bidders. Is there a way we could make a revised probate submission here for at least some of the higher sale price achieved? I have googled and can't see anything about undervaluation at time of original probate valuation.
 
IANAL

Once the house is sold, you have your market value.

In the current environment anything you put in the statement of affairs is a best guess.

You can submit a corrective affidavit CA26 - just double checked thats only for material errors & revenue dont consider market fluctuations to be a material error.
 
Thanks all. I note from revenue it does say property price fluctuations can't be corrected:

"It should be noted that events that happened after the date of death do not
constitute a material error or omission. For example, fluctuations in
property values after the date of death are not considered material errors".

In our case, we got 2 valuations and went for midway point between the two in an effort to be honest/fair about it, but with no consideration of note in valuation that it could go for more with competitive bidding. So the difference in price achieved isn't just down to fluctuations in the market. I think we didn't believe it could go for, but now that we are selling we can see that actually it is in high demand. It would seem unfair to be penalised due to inexperience.
 
You are not being penalised - the estate will pay CGT on the gain since date of death, and the balance will be added to the estate value for distribution
 
Easter said:
Thanks all. I note from revenue it does say property price fluctuations can't be corrected:

"It should be noted that events that happened after the date of death do not
constitute a material error or omission. For example, fluctuations in
property values after the date of death are not considered material errors".

In our case, we got 2 valuations and went for midway point between the two in an effort to be honest/fair about it, but with no consideration of note in valuation that it could go for more with competitive bidding. So the difference in price achieved isn't just down to fluctuations in the market. I think we didn't believe it could go for, but now that we are selling we can see that actually it is in high demand. It would seem unfair to be penalised due to inexperience.
Click to expand...

If you can prove that the date of death value of the property inserted on the Revenue Affidavit was incorrect I think Revenue will accept a Corrective Affidavit from you. That would constitute a material error in the original sworn Revenue Affidavit. As far as I know You have to get the same Auctioneer to do another valuation for the property at the date of death confirming he made an error in the first valuation and upload that on ROS. The new valuation also has to accompany the corrective Affidavit filed in the Probate Office.

Inheritance tax is generally based on the date of death values as that is deemed to be the date you received the inheritance. Sometimes Revenue will accept a corrective Affidavit citing the value as at the date of issue of the Grant of Representation from the Probate Office as that is the date in which the Executor / Administrator can distribute the estate. There is information on the “Valuation date” on www.revenue.ie which would be useful to you.

If a corrective Affidavit is accepted by Revenue then CGT is calculated on the difference between the corrected value of the property as at the date of death / date of issue of Grant of Representation and the sale value. As previously indicated the CGT is payable by the legal personal representatives named in the Grant of Representation on behalf of the estate and there is no personal relief available to the estate. The beneficiaries cannot complete the CGT return or pay the CGT
 
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