I want to minimise any capital gains tax due on inherited property that was transferred in my name five years prior to the owner’s death. I lived in the property for 11 years before moving out.
Arthur Weller replies:
Your base cost for capital gains tax purposes will be the market value of the property on the day you acquired it, which will be five years prior to the owner’s death. The 11 years you lived in it will be exempt, as will the last nine months of ownership. So let’s say the base cost was £100,000, and you sell it for £300,000, after owning it for a total of 20 years. The gain per year will be £10,000, and you will therefore be entitled to £117,500 principal private residence relief.