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Where Taxpayers and Advisers Meet

CGT on Residential then Buy-2-Let

psamiad2791
Posts:1
Joined:Mon Jul 08, 2024 5:05 pm
CGT on Residential then Buy-2-Let

Postby psamiad2791 » Mon Jul 08, 2024 6:12 pm

Hello,

I wonder if someone can give the likely CGT liability for the following scenario:-

Purchased property for £85K in 1999

Lived in property until 2012 where it was valued at £250K. Re-mortgaged property as buy-to-let for £125K.

Property is now valued at £285K.

What would the rough CGT bill be?

Thanks for any info. Wondering if it’s worth selling?

AGoodman
Posts:1797
Joined:Fri May 16, 2014 3:47 pm

Re: CGT on Residential then Buy-2-Let

Postby AGoodman » Tue Jul 09, 2024 11:25 am

Gain of £200k

PPR relief covers 13/25 years
Unrelieved gain = 12/25 * 200k = £96k
After annual exemption (sole owner) = £93k
Tax = 24% * 93k = £22,320

(assumes single owner and owner is already higher rate taxpayer; ignores six month "free" qualifying PPR period at end of ownership; ignores deductions such as SDLT, legal fees, capital improvements.

The tax will be 18% to the extent it is within the basic rate band,


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