Inheriting a home is a pretty sweet experience, yet bitter at the same time… You are left with great property value you can use to improve your life, but you are still mourning the loss of a loved one. So you may tend to ask yourself at this point “what are the tax consequences when selling a house I inherited in London, England?” The tax laws have been designed in a way they will not add any more burden unto you upon inheriting the property. This implies that the financial consequences are less daunting than what you would expect, which is good news for you. 🙂
Tax Consequences when selling a house I inherited in London, England
Value of the estate
In order to comprehend how you’ll be taxed having inherited a home, you need to know how to value the estate. This refers to the asset cost for purpose of the calculation of capital gains along other taxes. When a person dies, the value of their property in London is increased to the market value as at the time of their death. For instance, if a person purchased a home 20 years ago for £25,000 but it was worth £100,000 at the time of their death, that property would be valued at the latter amount for the purpose of calculating capital gains.
Taxation of gains
Capital gains refer to what you earn from selling property that you use for either personal or investment purposes. Such can be houses, furniture and many more things. If you decide to sell an inherited home in London, that sale is regarded as capital gain or loss for the purpose of income tax.
Reporting the sale
Upon selling an inherited home, you have to report it for the income tax purposes. You should first calculate your capital gain. This is done by subtracting the value of the property from the sale amount. You should then report that amount to the necessary authorities.
Having an inherited home can be stressing given the fact that you have new property to take care of and pay taxes for it at the same time… You should go through the probate process in London as the first step to selling your home. The court will then authorise you to proceed as you wish. If there are any other individuals involved in the inheritance, you should first agree with each other on that decision. You can then file a petition requesting the court to allow you to sell the property.
You should then consider how much tax you are to pay. This will be paid against the capital gains resulting from the sale of the house. You can call Sell My House London now at 020 3633 9175 to undertake a smooth and legitimate sale of your home. We are local here in London, England and we know the market here better than anyone else. If you are still asking yourself what are the tax consequences when selling a house I inherited in London, then we would be happy to discuss it with you in more detail.
Selling an inherited house can relieve you of quite a burden. In addition to that, selling the property to an investor is a basic simple and fast process. Contact us for enquiries on how to go about things when selling your home in London and we will be glad to help you.