Who pays the CGT on house and when is it paid on Inheritance

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IsleOfMan

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If a house is willed to me and at time of death it is valued at €700k. When probate is taken out the value of the property has increased to €750k. If I sell this house for €750k do I have to pay CGT on the €50k increase in value. Do I have to pay it or does the executor have to pay it? Can the executor insist on paying it without reference to me?

If the house is not sold but transferred in to my name with the new value on it of €750k do I have to pay CGT on the €50k increase? Or is CGT paid only when the house is eventually sold? even if it is years later?
 
IsleOfMan said:
If a house is willed to me and at time of death it is valued at €700k. When probate is taken out the value of the property has increased to €750k. If I sell this house for €750k do I have to pay CGT on the €50k increase in value. Do I have to pay it or does the executor have to pay it? Can the executor insist on paying it without reference to me?

If the house is not sold but transferred in to my name with the new value on it of €750k do I have to pay CGT on the €50k increase? Or is CGT paid only when the house is eventually sold? even if it is years later?
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There's a lot going on there!

Firstly, CGT is payable on a gain made when making a disposal. Not a gain made when vesting property under a will.
Secondly, you need to establish valuation dates.

So - house is willed. There's a date of death value. This would usually also be the Probate value. But now always. If there is a gap between death and Probate, there can be a significant uplift. If, after that, the house gains in value and is then sold, yes, there is a CGT liability. Who pays it? Depends on whether the house is sold by the LPR ( legal personal representative of the deceased in the capacity of LPR ) or by the beneficial owner, the beneficiary into whose name the property was transferred.

But house is simply transferred into beneficiary's name. CGT , if ever due, is now a liablity for the beneficiary.

Can you apply any of this to the specific circumstances of the specific query?

Its very hard to apply rules to non specific situations.

mf
 
Thanks. The valuation on the house for probate purposes was €700k but when sold some months later it went for €750. So there was a CGT liability of €50k. The beneficiaries paid their CAT and CGT but later found out that the executor had also paid a sum in respect of CGT without reference to anyone.
We don't know in what format this was paid. A lump sum and in whose name? Individual payments on behalf of each beneficiary or even the amount paid as the executor won't engage with anyone.
As the executor no longer has secondary liability since the 2010 Finance Act to ensure that taxes are paid can he insist on making tax payments on behalf of beneficiaries?
 
The key question is who sold the house.

The executor or the beneficiaries?
 
As the executor no longer has secondary liability
If the beneficiary lives abroad the secondary liability still applies.

My understanding of inheritance tax is that it becomes payable by 31st Oct of the year you acquired the asset.

So say House A has probate valuation of 100k at of date of death 1st Jan 2015.

Grant of Probate comes through on 1st June 2015 and deed of assent to Beneficiary Joe completed by 30th June.

So Joe has to file and pay any inheritance tax by 31st Oct 2015 on the probate valuation of 100k.

If Joe sells the house the following year for 200k, then he has a CGT liability for the 100k gain.

Does that sound right to everyone?
 
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