Property Rental - Final Tax Return

by **The Gents** on Sat Jan 07, 2012 6:25 pm

Hi All.....Just hoping that someone may be able to give me some advice on my final tax return for 2010 - 2011.

I purchased a property in August 1985 for £14,750 and lived there for 15 years, until October 2000.

I rented out the property from Oct 2000 - Aug 2009.

I moved back into the property in Aug 2009 and lived there until June 2010.

I sold the property in June 2010 for £121,000.

On my last tax return 2009-2010, I stated on my tax return that I will no longer be renting out the property.

Can any one advise, as I have informed Inland Revenue that I no longer rent the propery out, do I have to fill in a final tax return and if so I am liable for any capital gains tax. I have lived in the property for16 years over the 25 years of owning.

Thanking you in advance...

by **mullet** on Sat Jan 07, 2012 8:37 pm

You have no liability to CGT. Ignoring acquisition/disposal costs and any enhancement expenditure (which would only reduce the gain):

Disposal £121,000
Acquisition £14,750
Gain £106,250
Private residence relief 15 + 3 out of 25 years = £76,500
Net gain £29,750
Lettings relief lower of PRR, gain arising by reason of letting and £40,000 = £29,750
Net gain = £0

Yes, you do have to declare this disposal in your 2010-11 tax return in order to claim the reliefs.

by **Peter D** on Sat Jan 07, 2012 10:16 pm

Yes I concur there is no CGT liability but you must report the disposal and claim the relief's both PRR ( PPR) and Letting relief. Regards Peter

by **The Gents** on Sun Jan 08, 2012 5:01 pm

Thank You Both, Peter D & Mullet for your helpful reply.

With only a few weeks to go for filing my tax return, I feel a whole lot better knowing that I am not going to get a huge tax bill.

Thank You

by **lastminute2** on Thu Jan 19, 2012 10:18 pm

Sorry to hijack the thread. Left my final tax return until the last minute.

Could someone please confirm my calculations are correct and I have no CGT liability?

Purchased = £47,500 (Jun 1997)
Sold = £137,500 (Jun 2010)
Gain = £90,000
PRR 6 + 3 out of 13 year = £62,308 (lived in property from Jun 97 to Nov 03, rented from Nov 03 to Feb 10, Feb 10 - Jun 10 empty)
Net Gain = £27,692

Thanks

by **pqtaxation** on Fri Jan 20, 2012 1:08 am

lastminute2 wrote:Could someone please confirm ..... I have no CGT liability?

Yes, no CGT liability.

PPR relief is for some 9 years (but use months in actual calculation).

Letting relief is for some 4 years (shorter time than PPR) and relieves gain of less than £40,000 not relieved by PPR

It looks from your round figures as though you have not added any legal and survey costs to purchase costs or deducted any estate agency and legal costs from sales price. Cost of capital improvements also. But including such allowable costs would only reduce gain that is fully relieved anyway.