I have three properties in total 2 rented out and 1 I AM LIVING IN MYSELF WITH MY FAMILY. I FIND IN DIFFICULT TO PAY THE MORTGAGE ON THE RENTED PROPERTIES SO I WOULD LIKE TO SELL MY LIVING HOME TO REDUCE THE MORTGAGE ON THE RENTED PROPERTIES. WHAT I WOULD LIKE TO KNOW IS THAT WOULD I HAVE TO PAY ANY KIND OF TAX ON THE MONEY I RECIEVE BY SELLING MY LIVING HOME BEFORE I COULD REDUCE THE MORTGAGES THEIR IS NO MORTGAGE ON MY LIVING HOME AT THE MOMONT, PLEASE HELP BECAUSE I DONT NO WHAT TO DO.
If you have lived in the house you are thinking of selling since you bought it you will not have to pay Capital Gains Tax on any profit you make.If it hasn't always been your main residence then you may have some CGT to pay. If that's the case let me know and I will tell you what I need to know to work out any tax liability.Tony40179.5544967245
IT WAS'T OUR MAIN RESIDENCE CAN YOU WORK OUT WHAT MY TAX LIABILITY WOULD BE.
If you can let me have the following information I'll do the calculations for you:1 The exact month and year you bought the house you are living in now and what it cost.2 The exact month and year you moved into the house.3 Details as to what was done with it when you were not living there. Was it let? If so, let me know the exact month and year it was let and the exact month and year the the letting stopped.4 If there was a gap between the periods you lived in the house due to letting, let me know the exact month and year you moved back in.5 The value of the property now.
BOUGHT THE HOUSE OCT 2004 PURCHASE PRICE £90000.00. MOVED INTO THE HOUSE ON THE JAN 2009. LETTED OUT ON THE DEC 2004 AND STOPPED ON THE DEC 2008. NO GAP IN BETWEEN THE LETTING PERIOD WERE WE MOVED IN. THE VALUE OF THE PROPERTY NOW IS £350000.00.
Thanks.When you calculate the gain on the sale of a property, it is treated as having accrued evenly over the entire period of ownership. That makes working out the taxable and non-taxable parts of the gain fairly easy.For the purposes of this calculation, I've assumed a sale in December 2009 for £350,000 which would give rise to a gain of £260,000 (£350,000 - £260,000). By that time, you had owned the property for 63 months.The gain for the period the property was your main home will be exempt as will the gain for the previous 24 months of ownership. The last 36 months of ownership of a property that has been your main residence are treated as an exempt period. Since you have lived in it for the last 12 months this is deducted from 36. That accounts for £148,572 (£260,000/63 x 36).The remaining gain of £111,428 is allocated as to £103,174 to the letting period and £8,254 to the vacant period. As the property was both your main home and let, you are entitled to a deduction from the remaining gain called letting relief which is the lesser of:1 £40,000,2 the main residence gain plus the gain for the previous 24 months which is £148,572 and3 the letting period gain of £103,174.So, £40,000 of the remaining gain of £111,428 is covered by letting relief leaving £71,428. The first £10,100 is exempt so that leaves £61,328 chargeable to CGT at 18% which would give rise to a tax liability of £11,039 if the property was sold on or before 5 April 2010.The taxable gain would be reduced by an additional £10,100 for each additional part owner.Tony40182.5173969907
Inc Tax, CGT, Corp Tax, IHT, VAT.