My sister and I inherited our mother's property after her death in April 2013. I have made offers to my sister to buy her share because the property needs renovation. I offered more than the valuation but she would not agree. I then decided to place the property in an auction in September this year but it did not sell. Two offers where made after the auction and the best of these was£40,000 under the reserve price. I am the administrator of the estate as my mother died intestate. Would I be able to buy out my sister at the lower valuation now it has been put on the market but not sold? If I renovate the property and sell it next year will I be liable for capital gains tax (CGT) on the whole of the sale price?

I cannot answer the first part of your question because I think it is more of a legal matter (which I am not qualified to advise on) and this is a tax column. Assuming you do not buy out your sister, if you renovate the property and then sell it, your base cost, for CGT purposes, will be the probate value of the house, plus your renovation costs. You and your sister will be liable to CGT on the difference between the sale proceeds and the base cost. If you buy out your sister's half, your base cost will consist of the probate value for your original half, the market value of the half you bought from your sister at the time you bought it from her, plus your renovation costs.