Question:
I have inherited a property on which I paid inheritance tax.The property was valued at £260,000 and has since risen in value to £385,000. How do I calculate how much tax I pay; is it simply capital gains tax £385,000 - £260,000 minus 40%?
Arthur Weller replies:
The capital gain on which you pay tax is £385,000 minus £260,000 = £125,000. The inheritance tax that you paid is not relevant here, and doesn't come into the capital gains tax computation.
