UK Property Law
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Is the property just in your name please or joint names?
thank you. In order to calculate your gain, you need to add up the total number of years you have owned the property and divide the gain by that number of years. . This gives you your yearly gain.
from that figure, you can deduct those years in which you were resident in the property, and, if you are prepared to move back into the property prior to selling the same, you can deduct the three years prior as well.
this should leave you with three years worth of gains out of the 11 years you have owned the property based on what you say.
from this figure, you can further deduct your annual unused allowance of £10,900 and private lettings relief. The maximum amount of Letting Relief due is the lower of:£40,000
the amount of Private Residence Relief due or
the amount of gain you've made on the let part of the property
in order to obtain the last three years of principal private residence relief, you need to be able to show that you have cheated the property as your main home. There is no minimum or maximum period must do so, providing you can demonstrate that you have genuinely treated the property as your main home for a period prior to sale. . This is normally tested by what you have spent most of your time at the property for that period and that there is post been sent there and so on
private lettings relief does applying your case because from what you say, you lived in the property before you rented it out
Is there anything above I can clarify for you?
based on what you say, you should be able to limit your capital gains tax exposure to a three-year period of ownership from which you can deduct your annual allowance and private lettings relief as above.
the amount of tax that would apply on any remaining gain would be either 18% or 28% depending upon whether you are a basic rate or higher rate taxpayer
You are allowed to earn £34,370 before you go into the higher rate tax bracket. If you earn more than this then you will pay 28%. If you earn less then you can allocate unused income tax band to your gain until you reach £34370 after which you pay 28%
Does the above answer all your questions or is there anything I can clarify or help with any further?
They are two entirely separate things. You have an annual allowance of £10900. On top of this you have lettings relief you can apply. I will have a quick look at the calculation...
Gain after applying annual exempt amount of 10900 is 104100
Remaining annual exempt amount is 0
Gain after applying losses brought forward of 0 is 104100
Divide by 11 years = 9463.64
Discount 5 years + 3 Years = 3 years remaining (9463.94 x 3) = 28,390.90
Discount private lettings relief £28,390.90
Gain = 0
I cannot see that you will have a CGT liability if you are prepared to move in before sale.
Is there anything above I can clarify for you any further?
There is no statutory to find period of time. . What is required is that you can show that you have genuinely moved to the property and treated it as your principal residence prior to sale. , much less than a month or so would in my view be rather adventurous. the important issue is to be able to evidence that during whichever period you live there, you genuinely treated as your main residence by way of having post sent their and paying Council tax and be able to explain what the position was with regards XXXXX XXXXX other properties, you may own during that period to demonstrate you are not living there in the event that you receive an enquiry from the revenue. Keeping paperwork such as bills and seller to demonstrate the above is useful
is there anything else I can help you with?
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