Capital Gains Tax is a tax on the profit when you sell an asset that has increased in value since it was first bought.
You only owe capital gains tax on an inherited property (or shared) if you sell it for more than the amount it was valued at during probate. This can happen if you inherit a house, keep ownership of it for several years, and then decide to sell it further down the line.
Even in this instance, though, you might be able to avoid tax if the house has become your main residence.
Capital gains tax is charged at 18% for low-rate taxpayers and 28% for higher rate taxpayers. As of 2023, the annual tax-free allowance is £6,000 – which means that capital gains tax must be charged on everything over this.
For example, if a property rises in value from £500,000 to £600,000, then exactly £94,000 will be subject to capital gains tax.