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Where Taxpayers and Advisers Meet

Gains on my wife's second property?

piggolo
Posts:4
Joined:Thu Jul 20, 2017 10:49 am
Gains on my wife's second property?

Postby piggolo » Thu Jul 20, 2017 11:16 am

Hi,

My wife and I jointly own our marital home. My wife also owns a second property purchased in 2006 in her sole name which pre-dates our marriage.
Her elderly mother has lived there rent free for the entire period of ownership but is becoming increasingly frail.
It appears likely that we'll need to sell the property but I have no idea whether we (she) must pay capital gains, how this would be calculated and declared.

We haven't made alterations apart from new fences, a garden wall, fascia's and general upkeep.

Can anyone help please?

thanks in anticipation....

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Gains on my wife's second property?

Postby SteLacca » Fri Jul 21, 2017 12:04 pm

Did your wife ever live in the house as her principal private residence?

piggolo
Posts:4
Joined:Thu Jul 20, 2017 10:49 am

Re: Gains on my wife's second property?

Postby piggolo » Fri Jul 21, 2017 1:21 pm

Unfortunately, "No".

piggolo
Posts:4
Joined:Thu Jul 20, 2017 10:49 am

Re: Gains on my wife's second property?

Postby piggolo » Fri Jul 21, 2017 1:22 pm

I'll add...., not in recent years but only for a couple of years prior to marriage.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Gains on my wife's second property?

Postby maths » Fri Jul 21, 2017 1:40 pm

Purchase 2006 and sale, say, 2017. Owned 11 years.

Assuming she lived in her property pre marriage for 2 years as her sole residence then of the gain 3.5/17ths are CGT free.
7.5/17ths subject to lettings relief
Plus an exempt amount of 11,300.

EG

Bought 70,000. Sold 240,000.

Gain 170,000.

Exempt 3.5/17 x 240,000 = 49,411
Lettings relief 40,000 (capped)
Annual exempt 11,300

Gain subject to CGT 69,289.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Gains on my wife's second property?

Postby bd6759 » Fri Jul 21, 2017 2:04 pm

Having a bad maths day, maths?

Bought 2006, sold 2017 = 11 years.

Gain £170,000

PPR Exempt 3.5/11 x £170,000 = £54,090

No letting relief as property has not been let.

[NB for OP - calculation should be done in whole months, not years]

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Gains on my wife's second property?

Postby maths » Fri Jul 21, 2017 3:00 pm

Yes bad maths day it seems.

Trying to be a clever dick answering posts between meetings. Still, absolutely no excuse.

Possibly the bad weather interfered with the numbers when travelling through the ether or whatever.

Apologies to original poster.

piggolo
Posts:4
Joined:Thu Jul 20, 2017 10:49 am

Re: Gains on my wife's second property?

Postby piggolo » Fri Jul 21, 2017 8:51 pm

OK. Our gain could be around £150,000 gross for the whole term.

Can we reduce this by deducting costs (solicitor, removals, stamp duty, improvements, cash invested over the years) ?

The whole term in months could be 134 (months).
The pre-marriage term will be 20 (months) when my wife lived in the property

Where does the 3.5 that you quote come from ?

Thanks for looking at this for us.....

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Gains on my wife's second property?

Postby bd6759 » Sat Jul 22, 2017 10:20 am

2 years exempt as a residence, plus the law allows a further 18 months

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Gains on my wife's second property?

Postby SteLacca » Mon Jul 24, 2017 12:45 pm

OP confirmed in response to my 1st question that it was never her PPR.


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