Hi I bought a property in Oct 2002 as my main residence for £253kI moved out in March 2005 and started renting it out in Arpril 2005 to Nov 2009 when i sold it for £330k.1. Can i claim partial capital gains relief2. Can i claim lettings relief to nulify any capital gains tax I need to pay.3. Can i use my capital gains allowance alsoI have been asked by the tax office to provide a computation of the capital gains tax and I'm not 100% sure how to do it and do not want to make a mistake.Cost of property (Oct 02) £253,000 Stamp duty £7,590Legal fees £1,500Total cost £261,590Sale of property £330,000Original cost £261.590 –Solicitors fees £1,500 - Estate agent fees £4,000 –Mortgage redemption fee £3,000 –
System of Law: England-and-Wales
HMRC and the web but I'm not 100% sure and do not want the tax man on my back for making a silly error in calculating this.
Hi.Can you tell me if you were the sole named owner of the property please.TonyTax41058.4823525463
It was in joint names with my wife.
Thanks.You made a gain of £62,410 (£330,000 - £253,000 - £7,590 - £1,500 - £1,500 - £4,000). The mortgage redemption fee is not a deductible expense. By the time you sold it, you had owned it for 86 months of which you lived it for 30 and let it for 56.The following figures are for each of you and your wife as you will each need to disclose your respective shares of the gain. It's not simply a matter of dividing the botXXXXX XXXXXne by two as letting relief does not always work that way.The gain for the period the property was your main home is exempt from CGT as is the gain for the last 36 months of ownership. That accounts for £23,948 (£31,205 / 86 x 66). The remaining gain of £7,257 is that part of the letting period gain which is not covered by the last 36 months of ownership (£31,205 / 86 x 20).As the property was both your main home and it was let you are entitled to letting relief which is the lesser of:1 £40,000,2 the sum of the main residence gain and the gain for the last 36 months of ownership of the property which is £23,948 and3 the letting period gain of £7,257.So, the remaining gain will be covered by letting relief of £7,257 and you should each have no CGT to pay.Let me know if you have any further queries.
A couple of things I need to clarify.
Can i just do this in my name as I've been filling out the tax returns for myself only concerning the letting of this property and not been involving my wife.
Also the calculations you've shown would that do as a computation that the tax office would accept in that format.
You could but as the property is jointly owned, the gian should strictly be split 50:50. If you do disclose it as your gain, then all the figures for main residence relief and letting relief need to be doubled. You can set out the figures as I've described them in a calculation for the Revenue unless they have issued you with a tax return to complete.TonyTax41058.5410334838
Inc Tax, CGT, Corp Tax, IHT, VAT.