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Where Taxpayers and Advisers Meet

Need help with CGT Calculation please

Posts: 8
Joined: Wed Jun 10, 2015 4:17 pm

Need help with CGT Calculation please

Postby ck_uk » Wed Jun 10, 2015 4:34 pm


First post on this forum. I'm trying to make an accurate CGT calculation for the sale of a BTL property, here's the scenario:
This is a second property which was bought jointly on a BTL mortgage, owned for 32 months but has never been let.

I've included some approximate figures to indicate my calculations. I think the calculations are correct but I'm not sure whether, when calculating final profit, you would add the exemption amount back into the final figure, or is this just used in the allowance against calculating the CGT liable?

A Purchase Price 150000.00
B Purchase Costs 3000.00
C Refurbishment 3000.00
S Sale Price 220000.00
D Selling Costs 3000.00

Taxable Gain (S-A-B-C-D) = 61000.00

Annual Exempt Amount (x2) 22000.00
Amount Liable to Tax 39000.00
50% Lower Rate (18%) 3510.00
50% Higher Rate(28%) 5460.00
Total CGT Payable 8970.00

Profit (Amount Liable-Total CGT) = 30030.00
Actual Profit (inc Exemption Amt 22k) = 52030.00 ??

I'm also trying to work out whether it's worth clearing the mortgage and moving in for 6 months before selling, to take advantage of the 18 month rule?

Any advice greatly appreciated.

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

Re: Need help with CGT Calculation please

Postby Peter D » Wed Jun 10, 2015 4:58 pm

I find it off that the acquisition costs and selling costs are the same, and I need your individual gross income in the year of disposal.
HMRC may question this as they may take the view this was an investment property and IT and NI may apply not CGT. However you did acquire it with a BtL mortgage and I assume that was your intention. Regards Peter

Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: Need help with CGT Calculation please

Postby LozaACCS » Wed Jun 10, 2015 8:46 pm

If HMRC take the view that it was an investment property then CGT would indeed be in point, an acquisition of a property made with the purpose of realising either rental income (investment income) or for making a gain through an increase in value (an increase which is not created by development) is chargeable to CGT.
I cannot see any basis on which the gain could be taxed as trading income, particularly since the OP has spent only 3K on the property.

Posts: 8
Joined: Wed Jun 10, 2015 4:17 pm

Re: Need help with CGT Calculation please

Postby ck_uk » Mon Jun 15, 2015 8:50 am

Thanks for the replies, I have tried to call HMRC on numerous occasions to get their opinion on the matter but I can never get through to them!

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