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Where Taxpayers and Advisers Meet

cgt calc

davesmith
Posts:1
Joined:Wed Jun 03, 2015 9:42 am
cgt calc

Postby davesmith » Wed Jun 03, 2015 9:47 am

hi
quick check please
property purchased Aug 04 for £277500
Lived in Aug 04 to Jul 08 - 4 years
Aug 08 to date - rented - 7 years
to be sold now for £530000

solely owned

anyone know the gain pls

taxmenot
Posts:8
Joined:Wed Jun 03, 2015 1:54 pm

Re: cgt calc

Postby taxmenot » Wed Jun 03, 2015 2:15 pm

Please see below for my initial workings:

Proceeds: £530,000
less Aquisition Cost (£272,500)
__________
Capital Gain (gross) £252,500

You will be eligible for principal private recidence relief ("PPR") (s.222 TCGA 1992) which will reduce your gains. This relief is based on your period of ownership which I have calculated to be 128 months. Out of the 128 months, you have actually occupied the property for 47 months and you are deemed to occupy the property during the last 18 months before the property is sold.

Therefore, your PPR will be around £128,222 and given that you let the property during this time you will get lettings relief ("LR") and this will be a maximum of £40,000.

After applying the above reliefs you are looking at a gain of approximately £84,278 after which you will deduct your annual exemption which is £11,000. Your taxable Capital Gains tax ("CGT") will be calculated on £73,278. If you are a higher rate income tax payer, your CGT liability will be calculated at 28% which gives you a tax liability of £20,518.

Lambs
Posts:1522
Joined:Wed Aug 06, 2008 3:15 pm

Re: cgt calc

Postby Lambs » Wed Jun 03, 2015 2:33 pm

Lettings Relief..?

Lowest of

£40,000

Gain attributable to letting (seems to be higher than £40,000 and lettings period > period of residence?)

Gain attributable to PPR (Seems to be higher than £40,000 attributable to this period, as gains are deemed to accrue evenly over period of ownership)

Sole owner so only 1 x £40,000

Regards,

Lambs


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