If you receive a lump sum or an inheritance there may be cases where you need to let HM Revenue & Customs (HMRC) know. This guide explains when you might have to pay tax and who to contact in HMRC.
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If you get a lump sum, for example if you sell or dispose of shares or a property that isn't your main home, you may have to pay Capital Gains Tax. You don't have to pay Capital Gains Tax on personal possessions worth less than £6,000 or, in most cases, your main home.
For more information on assets that are liable to Capital Gains Tax or exempt follow the link below.
When you need to pay Capital Gains Tax
If you already fill in a Self Assessment tax return, you may need to fill in form SA108 - Capital Gains Supplementary Pages, either on paper or online as part of your tax return.
If you don't already complete a tax return, you should tell HMRC as soon as possible - and no later than 5 October in the year after you received the money. You may then need to complete a tax return.
If you inherit money, property or other assets from someone when they die, in most cases, you won't immediately have to pay tax on the legacy.
Tax when you inherit money, assets or property
However, you might have to pay Income Tax if whatever you inherit generates income for you, for example rental income from renting out a property.
You should let HMRC know about changes to income if you've received the income outside of your job or pension and it's not dealt with through Pay as You Earn (PAYE) by your employer or pension provider.
HMRC may be able to change your tax code so that you pay the right amount of tax. If they do this you'll get a PAYE Coding Notice explaining the changes to your code.
In some cases they may ask you to complete a tax return and pay any extra tax through Self Assessment.
For more information about tax codes
If you go on to sell, exchange or give away whatever you've inherited and its value has risen since the person died you may have to pay Capital Gains Tax.
If you already fill in a Self Assessment tax return, you may need to fill in form SA108 - Capital Gains Supplementary Pages, either on paper or online as part of your tax return.
If you don't already complete a tax return, you should tell HMRC as soon as possible - and no later than 5 October in the year after you received the money. You will then need to complete a tax return.
