Where Taxpayers and Advisers Meet

CGT on selling rental property

archie99
Posts: 1
Joined: Wed Aug 06, 2008 3:32 pm

Postby archie99 » Tue Jan 03, 2006 5:11 am

I need some advice on the following:
I bought a flat for £50K in Jan 1994. It was my primary residence until I took ou a Let to buy mortgage on the flat for £123K in Oct 2002, and moved into a house.
If I sell it for £180K, What is my potential CGT liability, as I understand I can take into account my period of primary residency and the last 3 years.
Any info greatly appreciated. Thanks

deanshepherd
Posts: 1019
Joined: Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Tue Jan 03, 2006 5:16 am

A combination of main residence relief and lettings relief means you will no have CGT to pay if you sell within the next few years.


Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk

billytf
Posts: 2
Joined: Wed Aug 06, 2008 3:32 pm

Postby billytf » Wed Jan 04, 2006 5:35 pm

in addition to archies question could someone confirm the following for me please?

purchased a flat in 2000 for 80k. it was my primary residece until 2003 when i moved abroad and rented the flat.

if i sell in 2010 for 160k, i have understood the following to be correct (different sources have given me different answers, hence clarification requested from a trusted source!)

80k capital gains over 10 years. six years free due to 3 years primary residence and 3 years free after.

therefore, four years CGT applies on 32k (2/5 of 80k), however, 40k is free, therefore no CGT to pay?

i hope someone can clarify

thanks

deanshepherd
Posts: 1019
Joined: Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Thu Jan 05, 2006 1:17 am

Probably true but not necessarily.

Lettings relief is restricted to a maximum of

i) £40k
ii) The amount of PPR claimed (6 yrs)
iii) The gain attributable to letting

It is likely that you will not have CGT to pay but the £40k is a maximimum threshold not an automatic allowance.


Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk

billytf
Posts: 2
Joined: Wed Aug 06, 2008 3:32 pm

Postby billytf » Thu Jan 05, 2006 3:11 am

ok, thanks very much for the info

MB976
Posts: 14
Joined: Wed Aug 06, 2008 3:32 pm

Postby MB976 » Sun Jan 08, 2006 3:08 pm

CAPITAL GAINS TAX CONFUSION

Hi, can someone please shed some light on this issue of mine as I would be very grateful indeed..

I have a second house bought in 2001 for £60k. It was bought with a £45K buy-to-let mortgage. The value of the house is now at £120K and my mortgage is approx £40K.

My salary is £31,750 a year.

My Problem is this.. I want to SELL this house and take the equity & capital gain to buy another house.

I understand since I bought the house, it has increased by £60K. (minus my CGT allowance 9K = £51K)

So is my CGT based on £51K?

Do I have to pay 40% CGT on £51K? If not, what percentage will the CGT be?

If I remortgage the house so that I have a bigger loan, then sell the house will this be a way of significantly reducing the CGT to pay?

Could I live in this house for more than 6 months and claim "main residence"? what are my benefits this way? Wud I be able to get away with paying any CGT?

I heard that if I 'sell' this house to buy another Buy-To-Let property, then I will not have pay CGT, is this TRUE???

your help on this matter will be greatly appreciated...


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