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Where Taxpayers and Advisers Meet

Lived in flat 8 yrs, then let for 6 yrs. Will I have to pay 18% CTG now?

luche
Posts:12
Joined:Wed Aug 06, 2008 3:54 pm

Postby luche » Thu Nov 01, 2007 1:38 pm

I bought my flat in 1993 for £72K. I lived in it for 8 years before letting it out. It's still let and is now worth about £280K. I may have to sell it in the next 12 months but my question is should I sell before April given the new CGT law?

Peter D was a star and advised me that I would need to pay about £4K CGT, given all the PRP, taper and letting reliefs. However, that was before the pre-budget announcement.

Will all these reliefs be done away with and simply an 18% tax put on the difference between today's price (guessing £280K) and the original purchase price of £72K which would be a massive 40-50K tax?

Any advice would be much appreciated.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Postby Peter D » Fri Nov 02, 2007 3:01 am

Hi I do not keep the spread sheets forForum enquiries, but yes if you sell the property after the 5th of April a flat 18% of the gain minus expenses will apply with no Taper relief but PPR and Letting relief will apply. Regards Peter

al_eebee
Posts:899
Joined:Wed Aug 06, 2008 3:40 pm

Postby al_eebee » Fri Nov 02, 2007 3:05 am

No you still get the PPR & letting reliefs but not the indexation or taper.

VERY Roughly
Gain £208k
PPR 11/15 x £208k = £152.5k
Letting relief £40k
Net gain £15.5k
Tax @ 18% £2,790

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Postby Peter D » Fri Nov 02, 2007 3:10 am

I would need your originally declared dates and values, rental dates and costs. at least MM/YYYY to do a sensible run of the numbers. Beware that this proposed 18% flat rate is under seriuos pressure and is is being questioned at to how appropriate it is both form a business asset and private asset point of view. Lats have the numbers. Regards Peter

luche
Posts:12
Joined:Wed Aug 06, 2008 3:54 pm

Postby luche » Wed Nov 07, 2007 2:16 am

Hi, sorry about the late reply - my internet connection has been playing up.

July 1993 - bought flat for £72K. Took out mortgage for £48,000.
Married in 1999 and moved into rented accommodation with my husband, However, I kept flat empty so I could use it during the week sometimes (I commuted to London to work).
Let flat out to tenants in 2001 - can't remember which month, let's say February.
My husband bought our family home (in his name whilst my flat is still in my name) in Feb 2002.
best wishes, Luche

luche
Posts:12
Joined:Wed Aug 06, 2008 3:54 pm

Postby luche » Wed Nov 07, 2007 2:28 am

Sorry, I've just realised I said the flat is now worth £280K. That should read closer to £380K. When valued in 2002 it was worth £280K.


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