Inheritance & CGT

[midland muck]

Hi all,

I am just looking for clarification on the tax treatment as outlined below.

I inherited some land about 4 yrs ago and paid inheritance tax based on the valuation from valuer etc. My query is whether I will be liable for capital gains tax if I proceed to sell it now.

I do not believe a sale will achieve the original valuation carried out for the inheritance tax purposes. If this is the case I presume I would not be liable for more tax on selling or am I reading this all wrong??

Thanks in advance.

 

[deadlyduck]

Three points worth mentioning:

1. When you inherited the land, you may have been entitled to a credit for any CGT paid by the estate on the disposal of the land.

2. Your cost of acquisition of the land at the original inheritance is deemed to be the market value of the land at the date of death. This will be set against the sales proceeds now achieved. You would be liable to CGT (if a profit) on the difference.

3. {Not sure of this one}: There may be a CAT issue if 'agricultural relief' applied to the original valuation of the land at the inheritance date. I cannot remember the details- it involves a clawback of some/ all of the agricultural relief depending on the time gap between inheritance and disposal- but you should check with your adviser if this applies.