Capital gains tax query

From: Nigel W

Here's one for the lurking Accountants. Just after a ballpark answer - will obviously seek advice if it becomes a live issue...

Scenario is this:

Brother and sister inherit large seaside home and land in 1992...but the place was built in the 1920s and has been in the family all that time.

If either:

1) sister buys out brother; or
2) place is sold to a third party

will CGT be payable by the current owner?

Appreciate views from the experts. I suppose the question is really - if you acquire property via a will after September 85 will it be subject to CGT when sold.

I suppose the other question is, if CGT is payable - is it worked on cost base etc...or just the 1/2 tax rate deal?

which i suppose gives rise to the third question - how do you work out the cost base for an inherited property?

many thanks in advance

ps. Dale - love the glamour shots on your website - anyone would think you're all real estate agents!
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Reply: 1
From: Duncan M

Hi Nigel,

Its my undertanding that the Capital Gain Position of the Testator is passed
to the beneficiary.. but they begin accruing capital gain at the date tof
the Testators death.. Given the property was acquired pre-1984, the
Testators position would seem to be no CGT implications (even it wasnt the
Family home)..

So they need to be able to establish its value at the date of the death of
their father/mother.. They will pay CGT on the amount the assett has
increased in value since 1992.


Duncan (non Accountant)
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Reply: 1.1
From: Owen .

I see you've fixed your MIME problem Duncan.


"Gambling promises the poor what property performs for the rich – something for nothing"
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Reply: 1.1.1
From: Duncan M

Yeah at last:

I am using Outlook.. (enough said already? :)) I've always had "Plain Text"
set as the format.. Stupid me, thats obviously MS Plain Text format! :)

Changing the Attachment Format to BinHex and the Encoding to Western Euro
(Windows) now results in real Plain Text messages..


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From: Sim' Hampel

On 2/26/02 3:13:07 PM, Duncan M wrote:
>Changing the Attachment Format
>to BinHex and the Encoding to
>Western Euro
>(Windows) now results in real
>Plain Text messages..

Of course ! So simple I'm amazed it took you so long ! *sigh*

* Sim' mutters something under his breath about the lack of standards in some vendors' software products.

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From: Nigel W

Will you techies stop getting off :)

I'm sure there's a chat room if you want to swap IT jargon!

I keep seeing further posts and check it out only to see its more technobabble! #^)

ps. Thanks for response Duncan.
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Reply: 2
From: Dale Gatherum-Goss


Thanks for the comments and feedback about the photos. I had to justify Sue's glamour photos as a tax deduction somehow and so we built an entire web page to prove to the tax office that they are tax deductible.

Hey, did you like the WEG cartoons?

We had a ball getting those done.

Have fun

Still smarting after the real estate comments. Ouch. That hurt!
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Reply: 3
From: Dale Gatherum-Goss


Seriously though, this question is not as simple as it might seem. To start with, we would need to know if either party is the executor of the estate. . . .

Anyway, assuming they are given their share of the property in 1992 as part of the estate, and, that the house was not the PPOR of them, or, their ancestor who left them the property, then yes, they will have CGT to pay.

Again, assuming that the deceased acquired the property before Sept 1985 the brother and sister are deemed to have acquired the property at the market value at the time of death.

Therefore, when they sell to a third party they will have to get a valuation as at 1992.

If they sell to each other, they will have to get a valuation at the time of death AND now.

We would claim the 50% exemption from CGT because the property has been owned for more than 12 months.

Does this help? Let me know if you would like more detail.


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