Capital Gains and Losses

# I would like to know roughly how much cgt i would have to…

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Hello, I would like to...
Hello, I would like to know roughly how much cgt i would have to pay upon selling me main residential home. My wife and i own the home 50% each, both are higher rate tax payers. We bought the property for 85000, have paid approx 50000 in roofing, extension and central heating (there was only central heating in the bedoom when we bought it). We are selling for approx 475000. We bought in 2000, let it out from 2006 till now. Upon selling what would our cgt be?
Submitted: 2 years ago.Category: Capital Gains and Losses
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2/27/2016
Tax Expert: bigduckontax, Accountant replied 2 years ago
bigduckontax, Accountant
Category: Capital Gains and Losses
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Your exposure to CGT depends upon the let period. Your question is silent as to when you acquired this property. Once I have this information I will be able to assist you further. I assume you occupied the home before you let it out.

Tax Expert: bigduckontax, Accountant replied 2 years ago

Sorry, wake up, Keith!

Your capital gain is 475K - 85K - 50K = 340K, divide by two, 170K each. Your total ownership period is 192 months. Let period is 120 months. Deduct last 18 months, you are deemed to be in occupation for this period even if this is not the case, leaves 102 months of letting. Proportion of gain exposed to CGT is thus 102 / 183 [say 56%] = 190K, 95K each. From this deduct 11.1K (Annual Exempt Amount (AEA)), not cumulative, and Lettings Relief (LR) up to 40K. This leaves some 44K each liable to CGT at 18% or 28% or a combination of the two rates depending on the individuals' income including the gain in the tax year of sale. Worst case scenario is a tax bill of a tad over 12K each.

I do hope that I have shed some light on your position.

bigduckontax, Accountant
Category: Capital Gains and Losses
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