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Re: Tax re: selling share of house UK

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Newbie

Views 831

Replies 4

I've seen a number of posts about the same thing but slightly different question.

 

1980: My in-laws purchase house in UK GBP 20,000

1989: My wife and I move to Australia

2015: My wife's Mother dies leaving house shared between her four children (three in UK, my wife in Australia) @ 25% each 

2019: House sells for GBP 180,000

 

We own small business that in 2018-19 turnover apr. $250k with net profit of $120k

We do not own property in Australia or any other assets in UK

 

Just curious to find out if any experts here have knowledge of the implications that possible Inheritance Tax/CGT deductions might have on the amount of GBP 40,000 in this instance.

 

Thank you.

  

 

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Most helpful response

Devotee

Replies 2

Hi

 

Capital gains tax (CGT) will apply from the date your wifes mother died. There is no tax on the inheritance itself and its value at the point she died but any change from its market value at that date is subject to CGT ie after inheritance.

 

The difference in the value from that date to eventual sale is likely to be subject to CGT as it is then post cgt property.

 

https://www.ato.gov.au/General/Capital-gains-tax/Deceased-estates-and-inheritances/Inherited-dwellin...

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time

4 REPLIES 4
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Taxicorn

Replies 0

@064623 

 

House is probably pre CGT (20/9/1985) so possibly no CGT.

 

If there were no major improvements made after 20/9/1985, still no CGT.

https://www.ato.gov.au/General/Capital-gains-tax/Your-home-and-other-real-estate/Capital-improvement...

 

If the house was never used as a rental property, no CGT.

If you did not own any other property between inheriting and selling the uk one, no CGT

 

No inheritance tax in Australia.

 

Sound like you may be ok and not have to declare this as there are no CGT implications.

 

https://www.ato.gov.au/General/Capital-gains-tax/Deceased-estates-and-inheritances/Inherited-dwellin...

 

 

I would stilll either seek th advice of a Tax expert and / or seek a private ruling from the ATO which are free and will cover you if anything ever comes up

 

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Most helpful response

Devotee

Replies 2

Hi

 

Capital gains tax (CGT) will apply from the date your wifes mother died. There is no tax on the inheritance itself and its value at the point she died but any change from its market value at that date is subject to CGT ie after inheritance.

 

The difference in the value from that date to eventual sale is likely to be subject to CGT as it is then post cgt property.

 

https://www.ato.gov.au/General/Capital-gains-tax/Deceased-estates-and-inheritances/Inherited-dwellin...

 

This is my personal view; I’m an ATO employee who chooses to help out here in my own time

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Taxicorn

Replies 1

@064623  @Mark1 

 

Sorry, must've have been asleep when I answered the question.

@Mark1  is correct there will be some CGT to be calculated.

 

Best to see a Tax expert to minimise this amount.

 

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Newbie

Replies 0

thank you Mark1 & macfanboy