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Where Taxpayers and Advisers Meet

CGT help on home please - I'm confused

Yat182
Posts:9
Joined:Mon Apr 26, 2021 11:26 am
CGT help on home please - I'm confused

Postby Yat182 » Fri Oct 08, 2021 11:16 am

Hi All,

I'm really hoping someone can please help as I cannot get my head around this situation.

I owned a home for 12 years which I have just sold. Its the only home I have ever owned. However, I only lived in this home for 5 of the 12 years. For the other 7 years I moved back in with my father (he needed care help), and so I rented my house out. The sale has just gone through now for my house.

Do I need to pay CGT on the sale of this house? The gain I have calculated is £50,000. (I am a higher rate tax payer).

If I do need to pay CGT on the sale of the house, do I then get 5/12 Private Resident Relief?

Do I get any letting relief as well?

Apologies if the above scenario is simple, but I cannot get my head around the HMRC guides regarding this. Any help would be greatly appreciated.

Many thanks

AGoodman
Posts:1308
Joined:Fri May 16, 2014 3:47 pm

Re: CGT help on home please - I'm confused

Postby AGoodman » Mon Oct 11, 2021 11:11 am

Yes, you will need to pay some CGT at 28%. You can deduct any SDLT/solicitors fees and/or capital improvements. You can then deduct the 5/12 PPR and then your annual exemption.

You can also claim PPR for your last 9 months of ownership even if you did not live there.

I'm afraid that lettings relief has been abolished in these circumstances and cannot be claimed at all any more.

Yat182
Posts:9
Joined:Mon Apr 26, 2021 11:26 am

Re: CGT help on home please - I'm confused

Postby Yat182 » Mon Oct 11, 2021 4:28 pm

Thank you for your reply AGoodman.

So, just to see I have got this right:

CGT Liability following property sale of £50,000 (I still need to deduct the solictors fees)

CGT at 28% = £14,000

deduct 5/12 PRP, so 5/12 of the above £14,000 is £5,833

Total net liability = £8,167


Please let me know if I have misunderstood the above
Many thanks

AGoodman
Posts:1308
Joined:Fri May 16, 2014 3:47 pm

Re: CGT help on home please - I'm confused

Postby AGoodman » Tue Oct 12, 2021 7:46 pm

Gain = £50,000
Deduct 5/12 leaves £29,160 (ignoring the possible 9 additional months of PPR)
Deduct annual exemption of £12,300 = £16,860
Tax @ 28% = £4,720

Yat182
Posts:9
Joined:Mon Apr 26, 2021 11:26 am

Re: CGT help on home please - I'm confused

Postby Yat182 » Thu Oct 14, 2021 2:29 pm

Thank you so much AGoodman


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