What Capital Gains Tax applies to an inherited property?

Q.

You were recently asked a question about CGT on selling an inherited property and you replied that you pay "CGT on any increase in value from the date of your mother's death." My understanding was that the CGT is based on the sale price less what it cost the benefactor to buy the property. Is this incorrect? The reason I ask is that I inherited two investment properties from my late father five years ago. They have never been lived in by any member of the family. I will shortly be selling the properties in order to finance the buying of my own residence. Will the CGT be calculated on whatever the sale price is less what it cost my father to buy the properties, or will the CGT be calculated on the sale prices less the value at the time I inherited the properties?

It's easy if you remember that death doesn't trigger CGT, it merely transfers the existing CGT liability (if any) to the beneficiaries. Therefore, if it was a CGT exempt property, such as a pre-1985 asset, or the family home, you would be deemed to have acquired it at it's market value at date of death. If the asset is not exempt your cost base is the same as that of the deceased. Make sure you get your accountant to do the sums for you.