Author Topic: Confused about tax  (Read 409 times)

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Offline HarmanC

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Confused about tax
« on: March 20, 2018, 11:33:31 AM »
Hi!

My grandfather recently passed away, and I have inherited his old car. I can't afford to keep it (high insurance and tax) so looking to sell it. I'm looking to sell it for around 2500-3000 - my question is is this taxed as income, as I haven't bought the vehicle? This tax calculator says it will put my income in the higher bracket, and I don't want this to bring all my income under the higher bracket. Hope someone can get to me soon :) Thanks in advance.

-H

Online The Growler

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Re: Confused about tax
« Reply #1 on: March 20, 2018, 12:17:47 PM »
Hi Harmanc, welcome to the madhouse.
As your inherited car is now an asset , any profit from the sale will be subject to capital gains tax rather than income tax. Your annual allowance for this is many times the value of the car , so unless you sell a lot of other stuff, you are not due to pay any tax. ( I think the allowance is about 11k per annum )
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Offline Sunflower

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Re: Confused about tax
« Reply #2 on: March 20, 2018, 01:49:48 PM »
:wave Hi HarmanC, Welcome to FT! :welcome

Offline Percy Vere

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Re: Confused about tax
« Reply #3 on: March 20, 2018, 02:44:37 PM »
 :wave :welcome to the madhouse HarmanC. 

If you follow this link https://www.gov.uk/capital-gains-tax/rates to the UK treasurery's website, it will give you exact details of CGT rates.  TG is almost correct, it looks like the rate is 10% for a standard rate tax payer but, you have a CGT allowance of 11,300/yr so I don't think you would have to pay any tax at all.
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Online Dell-Boy

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Re: Confused about tax
« Reply #4 on: March 20, 2018, 05:43:40 PM »
Your Grandfather's car would have been included in the valuation of his estate and whatever tax was due would have been settled by estate probate if indeed any was due above the tax ceiling as laid down by HMRC. The Executor of your Grandfather's will would have dealt with all the financial side of his death.

You have the car left to you in his will..........you sell it.    You owe nothing

Online The Growler

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Re: Confused about tax
« Reply #5 on: March 20, 2018, 05:49:21 PM »
Not quite true Dell. If it was sold for more than the probate valuation , it would be subject to tax on the profit. However , as it will still be way below the allowance , there will be no tax to pay.
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Online Dell-Boy

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Re: Confused about tax
« Reply #6 on: March 20, 2018, 07:00:15 PM »
Not quite true Dell. If it was sold for more than the probate valuation , it would be subject to tax on the profit. However , as it will still be way below the allowance , there will be no tax to pay.

Which is what I said.

and whatever tax was due would have been settled by estate probate if indeed any was due above the tax ceiling as laid down by HMRC.

if I am gifted in a will an item and it is below HMRC ceiling of personal tax on that item that I sell later on then there is nothing to pay.

Online The Growler

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Re: Confused about tax
« Reply #7 on: March 21, 2018, 03:21:42 PM »
Sorry Dell, you're missing my point. Harman would only have to pay tax if HE made a profit over and above the probate valuation., and if that profit was above his CG allowance.
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