This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Calculating CGT rate

vf001
Posts:7
Joined:Tue May 23, 2017 11:43 am
Calculating CGT rate

Postby vf001 » Tue May 23, 2017 11:58 am

When calculating CGT on the disposal of a buy to let property for 2016/17, if the taxable income is say £28,000 and the capital gain is £20,000. Is the CGT 28% on the whole £20,000 or is it 18% on the part of the gain up to the top of the basic rate band and 28% on the excess? Thanks in advance

Lambs
Posts:1611
Joined:Wed Aug 06, 2008 3:15 pm

Re: Calculating CGT rate

Postby Lambs » Tue May 23, 2017 1:44 pm

18% on balance of BR and 28% only on the excess.

Regards,

Lambs

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: Calculating CGT rate

Postby Peter D » Tue May 23, 2017 2:02 pm

Are you the sole owner of the property. Have you accounted for acquisition costs, fees and SDLT.
What about sales and legal fees. Does your taxable income include your rental profit for the year. Regards Peter

vf001
Posts:7
Joined:Tue May 23, 2017 11:43 am

Re: Calculating CGT rate

Postby vf001 » Tue May 23, 2017 7:30 pm

Thanks for the prompt response. Calculating the gain is the easy bit but everything I read didn't show examples of how to calculate the tax liability where the amount of the gain took the total into higher rate band

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: Calculating CGT rate

Postby Peter D » Wed May 24, 2017 8:19 am

Based on your numbers you do not fit into the 28% rate. Regards Peter

vf001
Posts:7
Joined:Tue May 23, 2017 11:43 am

Re: Calculating CGT rate

Postby vf001 » Wed May 24, 2017 9:21 am

How is that Peter? If the basic rate band is up to 32,000 taxable income, with taxable income of 28,000 and a gain of 20,000 I would have thought at least 16,000 of the gain would be at 28%? Is there any way of avoiding the higher rate?

toneekc
Posts:4
Joined:Wed May 24, 2017 9:38 am

Re: Calculating CGT rate

Postby toneekc » Wed May 24, 2017 9:53 am

Hi All

I'm trying to work out if we will have any CGT to pay if we sell our B&B.
I have read that the time period involved, is from when you bought the property (1986) to when you sell.
Having applied all reliefs and expenses I have come up with a tax payable figure of just over £54,000.

Where I'm stuck is; the property was lived in for three years before it was opened as a B&B and then over a period
of 10 years the business percentage grew from opening with 4 sleeping rooms to 9.

Do I divide the tax payable figure I've arrived at by the number of days over 31years then reduce that figure by
a) The number of days we were not trading, and;
b) Decrease the Principal Private Residence Relief percentage as we built up the business.


toneekc

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: Calculating CGT rate

Postby Peter D » Wed May 24, 2017 10:31 am

My mistake I did not schroll down enough. There is a CGT bill for £1602.
You have not used the IT and CGT Allowances. Regards Peter

vf001
Posts:7
Joined:Tue May 23, 2017 11:43 am

Re: Calculating CGT rate

Postby vf001 » Wed May 24, 2017 10:35 am

No problem - I meant the figures were after allowances. Just confused about how the tax charge was calculated as opposed to the taxable amounts which I can cope with.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: Calculating CGT rate

Postby Peter D » Wed May 24, 2017 10:56 am

If you are telling me £28,000 taxable and £33,000 CG Taxable then
18% 28%
720 5,012

Regards Peter


Return to “Capital Gains Tax, CGT”