The Higher the Price I Pay for a House, the Less CGT I pay?

[ohdearme]

Please help

I sold a flat for £440.000 , paying £39,000 for it in 1994. About £100,000 CGT to pay.

Yet. I understand (if I have this correct) that if I buy another house within a year or so, CGT will be "deferred" and that the more I pay for the house the less CGT I pay.

Is this correct, it seems odd?

Greetings to all

[bd6759]

No. That is not correct.

[darthblingbling]

From your previous post i think you're thinking about deferral when the payer doesn't actually get the asset in question. So for example money you receive from an insurer if an asset is damaged or destroyed.

This won't apply in your case. As you have already disposed of the asset I think the only realistic options to defer or exempt the gain would be EIS or SEIS investments, to which are extremely risky and you'd need to get specific investment advice

[ohdearme]

Thank you both. It seems that where I buy before 24th May next year, there is a deferral.
Is this how it works? It seems that the more I pay, the less tax. What have I got wrong?

If I buy no property:
1) Disposal: Net sale proceeds 430,335 + service charge £10.115 = £440,450.
2) cost of flat £39,000 Chargeable gain: £401450.
3) At 28% tax is £112406.

If I buy at £390,000.
then 440,450 less 390,000 = chargeable gain of £50,450 less annual allowance £12,000 = Net taxable gain of £38450. CGT at 28% = £10766.

If I buy at £350.00.
then £440,450 less £350,000 =chargeable gain of £90450. less annual allowance of £12,000 = Net taxable gain of £78450 CGT at 28% =£21966.

If I buy over £428 450, no CGT is payable.

I am confused, please help.
Regards

[darthblingbling]

There is no deferral available if you're simply buying another property.

Please read the posts above

[ohdearme]

Many thanks.

Regards