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Where Taxpayers and Advisers Meet

How to work out gain - Transfer of Equity

JEFF26R
Posts:18
Joined:Mon Mar 08, 2021 3:16 pm
How to work out gain - Transfer of Equity

Postby JEFF26R » Sun Mar 28, 2021 11:26 am

Work out your gain
Your gain is usually the difference between what you paid for your property and the amount you got when you sold (or ‘disposed of’) it. :roll:

2010 Paid £475,000 for 100% and occupied as main residence

2021 Transferred 45% equity as a gift to parents and moved out as main residence, parents lived there as main residence

2025 Sold £775,000 for 100%
2025 55% of £775,000 = £426,250
Main residence 12 years
Non residency 4 years

Is mine a loss, as I paid £475,000 and gained £426,250 so no CGT due?

Or does the gift somehow get included in my gain, and if so, how may I calculate my gain to use for the Private Residence Relief calculations?

How would my costs be included when I have paid 100% of the initial charges and how to calculate the improvement costs?

Does being domiciled abroad or tax resident abroad make any difference to the calculations?

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: How to work out gain - Transfer of Equity

Postby maths » Sun Mar 28, 2021 7:13 pm

On sale in 2015 you were entitled to 55% x £775k = 426,250
Your base cost at that time was 55% x £475k = 261,250

Taxable gain is [[426,250 - 261,250] x 3.25/16] - 12,300 = 21,216

If property located in UK then domiciled or not makes no difference.
If property located in UK but resident outside the UK there will be a difference

Add initial costs to 475k then take 55% thereof.


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