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Where Taxpayers and Advisers Meet

CGT (PPR) - Order of Calculation

fin1
Posts:3
Joined:Fri Mar 08, 2019 12:27 pm
CGT (PPR) - Order of Calculation

Postby fin1 » Wed Nov 06, 2019 8:35 am

Hello,

I would be grateful if someone could confirm the order of the CGT tax calculation in order to arrive at the net gain, specifically this is to do with the calculation of PPR.

For example: I sold a house (which I have lived in and subsequently rented) for 305000. I purchased the house for 78750. My qualifying (happy with this bit) PPR period was 64/218 months.

(1) Is my PPR calculated as simply 64/218 x (30500-78750) = 58388? Or
(2) Is my PPR calculated as only after BUYING COSTS are deducted.....64/218 x (305000-Purchase price-solicitors fees-estate agency fees)? Or
(3) Is my PPR calculated only after BUYING & SELLING COSTS and MORTGAGE REDEMPTION are deducted?

Obviously I get a higher PPR is I only deduct costs after reliefs are applied?

Grateful if someone could help me clear up my understandind as cannot find a logical step-by-step process in HMRC guidance (only calculators that 'hide' individual steps.

Many thanks

darthblingbling
Posts:397
Joined:Wed Aug 02, 2017 9:09 pm

Re: CGT (PPR) - Order of Calculation

Postby darthblingbling » Wed Nov 06, 2019 9:08 am

It's on the gain, so after allowable costs

AnthonyR
Posts:321
Joined:Wed Feb 08, 2017 2:33 pm

Re: CGT (PPR) - Order of Calculation

Postby AnthonyR » Thu Nov 07, 2019 10:35 am

(3) Is my PPR calculated only after BUYING & SELLING COSTS and MORTGAGE REDEMPTION are deducted?
Just a note to add as well that your mortgage redemption is not part of your allowable costs for calculating the CGT, it's just the net proceeds less the cost of purchase and improvements (plus PPR/Lettings relief/Annual exemption etc).
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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