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Where Taxpayers and Advisers Meet

Right to buy discount and capital gains

Beary
Posts:1
Joined:Sun May 13, 2018 11:36 pm
Right to buy discount and capital gains

Postby Beary » Sun May 13, 2018 11:46 pm

Hi

How does capital gains get calculated when the council has given you a discount when purchasing?

E.g. Purchase price is £100000 but discount received reducing the amount paid to £50000
After either living abroad or letting it out, you sell it for say, £120000, is the gain the increase in value (£20000) or the difference received (£70000)
HMRC calc suggests the increase in value but I'm not sure
Thanks

AGoodman
Posts:1745
Joined:Fri May 16, 2014 3:47 pm

Re: Right to buy discount and capital gains

Postby AGoodman » Mon May 14, 2018 10:46 am

HMRC are correct, your starting point is £70k. From that you may be able to deduct some ordinary PPR and lettings relief

Maria2785
Posts:1
Joined:Sat Sep 15, 2018 10:55 am

Re: Right to buy discount and capital gains

Postby Maria2785 » Sat Sep 15, 2018 11:02 am

I know this is an older post but I am in a similar position. When using HMRC CGT calculator it asks the question "did you purchase the property at less than its value because the seller wanted to help". Surely the answer to this is Yes? If so than the CGT calculator uses the property value rather than the purchase price to calculate the gain.


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