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Where Taxpayers and Advisers Meet

Please can someone check my CGT Calculation. Is my logic accurate?

Joined:Wed Aug 06, 2008 4:08 pm

Postby mb444 » Wed Apr 30, 2008 9:04 am

I bought a flat for £120k in November 2002. I lived there until july 2004. From August 2004 it has been let and i have decleared all my income.

The property is now worth £220k, a gain of £100k

I have owned the property for 66 months , of which i lived there for 20 months. I have added 36 months Private residence relief. So total ememption is 56/66.

So the gains thats is taxable is £100k*10/66 = £15,151

Deducting the lettings relief of £40k therefore means i have no CGT to pay, if i was to sell the property now.

Thanks in advance.

Joined:Wed Aug 06, 2008 3:40 pm

Postby al_eebee » Wed Apr 30, 2008 11:28 pm

Your computation is correct

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

Postby Peter D » Thu May 01, 2008 5:44 am

Whilst you outcome may be right your calculation is not. You letting relief is only granted for the number of days you actually let it out and have not been converted to residencial days by way of the PPR 36 months so you have rented it out for 1356 days as of today (1/5/08) assuming you started renting it on the 14/08 and after deducting PPR converted days you gain relief on 291 days which is £14,599 not £40,000, leaving you with a slight gain. Aslo remember that the PPR apportionment is done in 'Whole' months to the 'day' and your ratio is 55/65. Using the 14th of the month you lived in it for 19 months and owned it for 65 months not 60. Regards Peter

Joined:Wed Aug 06, 2008 4:08 pm

Postby mb444 » Fri May 09, 2008 11:00 am

Thank you so much Al_elebee and peter D. Your comments were very helpful. I am sorry could not thank you earlier i was away.

Peter D, Even calculating Lettings relief pro rata to a day, I am assuming i have my personal capital gains relief of 9600 would meant i would ultimately not have to pay any tax. Am i right in this assumption?

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