Capital Gains Tax on Inherited Homes

Where a home is inherited for capital gains tax purposes the property is treated as acquired at the market value at the date of death. This is known as the probate value. Capital gains tax will only be charged when the beneficiary later sells the home, and even then it will only be on the uplift in value from the probate value to the disposal proceeds. If the home has been occupied as a main residence principal private residence relief can be claimed. In any case the annual CGT exemption will be due, and the remaining gain taxed at 18% (after April 2008). Note that if the property is sold by the executors it is still possible to claim PPR relief: Can executors claim PPR relief>