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Where Taxpayers and Advisers Meet

Flat bought to live in and then rented

ian h
Posts:1
Joined:Wed Aug 06, 2008 3:04 pm

Postby ian h » Tue Aug 12, 2003 3:53 am

I bought a flat in Jun 2001 for £124,000 under my name only and as my primary place of redidence.In Nov 2002 i moved out to buy a joint house with my girlfriend and rented the flat.Today the flat is worth approx £180,000 and i will continue to rent.
If i sell the flat in say 10 years time,at what price / date will CGT be calculated from??
Do i get the 36 months exemption after leaving in Nov 2002 as it was originally bought to live in rather than buy to let?? Also would it be favourable to put the flat under mine and my girlfriends name to double the CGT allowance every year???

Regards

Nigel Lord
Posts:518
Joined:Wed Aug 06, 2008 2:18 pm

Postby Nigel Lord » Tue Aug 12, 2003 4:09 am

Ian

It is not possible to answer your question without recourse to the market value at the date of sale (obviously not known).

If you sold in August 2013 for £350,000 to computation would read (usual apologies for formatting):
£
Proceeds - 350,000
Cost - (124,000)
Gross gain - 226,000
PPR (54/147)- (69,184)
Residential
Lettings - (40,000)
Gain - 116,816
Taper relief
(40%) - (46,725)

Releif - (40,000)

Gross gain - 70,089
Annual
Exemption
(02/03 rate) - (7,900)

62,189

CGT @ 40% = 24,876

There would probably be an income tax advantage to transfer part of the property and part of the right to income to your girlfriend, however, the calculation is complex. A deed of gift would be required. Please contact me if you need specific advice.

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk


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