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Where Taxpayers and Advisers Meet

CGT on sale of buy to let property -

confused person
Posts:7
Joined:Tue Jan 20, 2015 4:54 pm
CGT on sale of buy to let property -

Postby confused person » Mon May 02, 2022 7:48 pm

Hi there, I would be grateful if anyone can clarify a few points regarding CGT on yearly tax return please. My husband and I jointly owned a buy to let flat that was bought in October 2020 for £135,000, with legal/purchase fees of £6250. We sold the rented flat in June 2021 for £162,479 with legal/purchase fees of £2676. Am I interpreting the calculation rules as: Selling price, less original purchase price and less both sets of legal fees(on purchase and sale), leaving approx £18553, less a total of £12,300 exemption, which leaves £6253 applicable for CGT?

We are both basic rate taxpayers - would CGT be levied at 10% or 18%?

I complete a tax return every year, whereas my husband has been told not to complete one. Therefore do I put the full calculation onto my tax return - or do I have to complete 2 returns showing 50% on each return?

Also can I claim electrician fees incurred to bring the flat up to the legal requirement at that time (linked back smoke and heat alarms, co2 alarms etc) as an allowable expense?

Thanks for any help/advice. Much appreciated.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT on sale of buy to let property -

Postby bd6759 » Mon May 02, 2022 8:35 pm

A BTL for 8 months? Did you let it out?

strawn
Posts:96
Joined:Fri Jun 01, 2012 10:11 am

Re: CGT on sale of buy to let property -

Postby strawn » Mon May 02, 2022 11:50 pm

less a total of £12,300 exemption, which leaves £6253 applicable for CGT?
That should be an exemption of £12,300 each, shouldn't it?

confused person
Posts:7
Joined:Tue Jan 20, 2015 4:54 pm

Re: CGT on sale of buy to let property -

Postby confused person » Tue May 03, 2022 1:09 pm

Hi there, thanks for your help. Yes we bought it and let it out for the full 8 months. We did not live in it at any time. As the flat is in joint names does it mean we each have an exemption amount of £12,300 when calculating the CGT liability and is it entered on both tax returns (50% values on each one)? Also if there is a liability will it be due at 10% or 18%? Thanks so much for any info/help! My brain is beginning to burn itself out!!!!! Thank you strawn.

Scotty1904
Posts:3
Joined:Tue May 03, 2022 2:12 pm

Re: CGT on sale of buy to let property -

Postby Scotty1904 » Tue May 03, 2022 2:19 pm

If you owned it jointly you both return 50% of the gain each and you both get the AEA of £12,300. Based on your figures this means no CGT to pay.

If you did have tax to pay it would have been at 18% (or 28% higher rate).

Any tax due should also have been notified to HMRC and paid via the property portal on Gov.uk within 30 days of the disposal. (This was increased to 60 days wef 27 October 2021).

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT on sale of buy to let property -

Postby Jholm » Tue May 03, 2022 4:08 pm

On account of the short period between purchase and acquisition, I would be mindful to retain some evidence that this was intended as an investment and not just property development, which could be deemed a trade.

it's unlikely it will be an issue but one of the badges of trade refers to the time between acquisition and sale.

confused person
Posts:7
Joined:Tue Jan 20, 2015 4:54 pm

Re: CGT on sale of buy to let property -

Postby confused person » Thu May 05, 2022 7:23 pm

Hi Scotty and Jholm,
Thanks for your help and advice. I managed to confirm via HMRC (at last!), just what you had advised. Thanks so much for bearing with me and all your help. Off to do my tax return now!


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