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Thanks for your question.
Capital gains do need to be considered - as to whether any gain has been made from the sale price less the inherited value price. (So you need to establish the value of your share at the time you inherited it)
Costs to transfer the property into your name and fees to sell your share can also be deducted.
If what is left still shows a profit (gain), if it is less than £10,100 for this tax year, there will be no capital gains to pay.
If the amount is more than £10,100 - then any amount over and above this exempt limit with be liable to 18% tax.
A gain should be declared to HMRC the following 5 April after the sale has taken place - by completing a self assessment tax return to declare all income and a capital gain page completed for the gain made.
The tax must then be paid - the following 31 Jan
So if you made a gain on part share that was made Oct 2009
Declare this after 05/04/2010 on 2010 self assessment tax return
Tax must be paid no later than 31/01/2011
If you need any help with figures - then let me know
1) Date property inherited and your share of the value at that time
2) Costs to transfer property into your part name (your share of costs)
3) Whether you ever lived in this property since taking part ownership - if so provide dates (as some of the gain may be reduced by private residence relief)
4) Sale price and date sold
5) Costs to sell your part share
The part of the property that I sold was a strip of land to a neighbour for a garden which was sold for £50,000. sold approx 2 years ago
Date property inherited 04 2001
The value of the property at that time was around £750k the property was solely in my late husbands name but I assume half would of been mine
Lived in the property since new 15 yrs
Costs I cant exactly remember but around £2,000.
Dont know if it's relevent but the other executor would not sign for the property to put into my name unless he was paid £12,500 which he claimed the Estate owed him.
Thanks for your response
So can I clarify a few points
The property was in your late husbands name - and when he died who was the property left to ? If just you
How large was the piece of land sold
Was the land fenced off - or have any planning permission obtained by you prior to the sale
If the the property was left to you and other person/people
Is this still the case - that the property is owned with other people and if not when did this become your sole property
If so what share of the property is yours
Who lives in the property
Was the money from sale of the land split with other people
Yes just left to myself
No the land at the time was not fenced off nor did it have any planning permission
Roughly around 40' long by 20'
Thanks for your further response
As the land formed part of the enjoyment of the house - and is smaller than 0.50 hectares ( 53819.552 ft²)- and that it was not separate from the house, or had any planning permssion on it, you have no capital gains to consider, as this sale is covered under private residence relief.
See link here for claification.
See Page 5 and Heading Garden or Grounds
Many thanks most helpful
one last question the inland revenue have asked for a Capital Gains computation to enable them to review any tax implications as they feel this is deemed chargeable, what is it ??
They would want to see the sale price less
the inherited price
Less costs to transfer to your name
Less the costs to sell
Which would have to be done on a proportionate basis - as these figures would reflect the whole property and its land
However, along with this, I would write to them and advise that the land was less than 0.5 hectares - had previously been enjoyed as part of the garden - had no planning permission and had not been fenced off - so according to legislation - the sale of garden is not liable to capital gains as covered under private residence relief. And ask for their comments - and add a copy of the capital gains legislation that I gave you a link to-
And advise that you had every reason to believe that you were covered under this legislation.
You might want to engage an accountant to undertake this for you - but as a first port of call could address this matter yourself -
I have another question for you please.
I have a registered limited company in Spain, and have transferred money from that companies bank account to mine in the UK. As drawings wages which ever it should be called.
As the money is earned in Spain and Spainish taxes paid would I be liable for any tax in this Country.
ok how do I ask for you ??