Do I have to pay capital gains tax on an inheritance sale?
Capital gains tax is a complicated area of Tax Law that must be applied carefully to identify the correct result when determining whether capital gains tax applies to a particular transaction or not. Inheritance is one of the most complicated areas of capital gains tax. You must keep special records in connection with the acquisition of a capital gains tax asset through inheritance, except when it is a pre-CGT asset that you acquired before September 20, 1985.
In this case, you need to know if the person you inherited it from acquired the property before September 20, 1985. You also need to collect information about the equity value of the property on the day you died. In many probate matters, there will be a valuation of a property from the time the person passed away. It is the amount of the cost of the asset at the time of acquisition. You will need to get an asset valuation to accurately value it at the time of death.
However, if it was not a pre-CGT asset for the person who dies, you may need details of all relevant costs incurred, as well as those incurred by the trustee, who should be able to provide you with adequate information relating to East. It is important to note that if you inherited a home after August 21, 1996 that was the primary residence of the person you inherited it from, you can claim a full CGT exemption on the asset as long as it has a proper valuation.
So as you can see, if you are inheriting something from someone, CGT can be a very serious concern if you want to sell the asset for cash. You should definitely seek legal advice on something like this if you have any concerns about it.
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