Capital gains tax on a second home after inheriting another

Basil1

I wondered if someone could shed some light an issue someone i know is facing up to in not to distant future.
She has just inherited a property from an Aunt and is concerned about her position regarding capital gains on her existing home. She is due to take ownership of the inherited property within the next six months (deeds changed to her name) and wishes to sell her existing home after she takes ownership, Will she be liable for capital gains tax on her existing home once ownership is confirmed on the inherited property as her existing home will be in effect her second home? At this present moment time she has moved into the inherited property. Also just to add there will be a considerable profit on her existing home and she will be liable for a large capital gains bill. Thank you

Pian32

So she will be liable for capital gains. However that would be subject to PPR relief.

That's worked out by using the amount of time you have had the property as your primary residence compared to it not.

There are also some exemptions for different time periods most of which require you to return to the property and live there as a primary residence

The last of these doesn't require that and that is the last 18 months of ownership is always considered as living in for PPR.

Basically it will depend on how long it takes to sell. If quick then it's likely all/most of the Capital gains will be exempt.

Basil1

Thanks for your answer.
I take it that the capital gains calculation will be made via a solicitor on the selling of that property come the time or is it her responsibility via a self assessment to declare it then?

Pian32

I don't know if a solicitor will calculate it or not. It is her responsibility to declare it though just like with any self assessment matter.

Basil1

She's just bothered about making sure she pays any capital gains tax owed and being able to work it out should she be liable. For the time being she is living in the inherited property and is renting out her existing home.
That will of course be liable for tax under additional income. Will the rental agreement she has set up compromise her PPR status for that home in any way?

Pian32

The property has been used as a PPR so no.

Basil1

Thanks again.
Just lastly , how long of passage of time would it take for her to be liable for capital gains or is there a table somewhere (gov.uk) that she could use to make a calculation in the eventuality (to include in a Self Assessment) that she owes any CT.

Pian32

The rules on that have changed slightly this year. For residental property any gains have to be reported and paid within 30 days. It should also be reported on the relevant self assessment tax return for the year.

There is a lot more information on this on the government website.

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax