I own two residential properties which I wish to sell in the…

Hi mark wylie

Thanks for your question

Looking at the first property that was purchased outright - this will have a capital gain consideration

If you are likely to make £120,000 profit on the sale of this property then we have to consider two periods of time
1) the half share of profit so £60,000 that reflects your 50% share for the whole period of ownership and the other 50% share from 2006 to the date of sale - you will use the probate value of the property in 2006 to work out the gain for this period
Legal costs to buy, transfer and sell are deductible -

2) The second property you own will attract no capital gain - as this is covered by private residence relief for the whole period (including the time in 2009 when you worked elsewhere in the UK)

So we are left with just the first property to consider.
At present the first £10,100 of capital gains is exempt - as this is the annual exemption allowance - and the balance will be charged at 18% - however both the annual exemption allowance and the capital gain rate are subject to change.

The fact that you have never formally nominated a PPR in this case is irrelevant, as clearly the second property was your main residence - and the first one was not - due to it having someone else live there - and then it being rented out - and the fact that you spent no time there at all during the period of ownership - and therefore the facts of what took place is the consideration for capital gains


Thanks

Sam

Edited by SamTax on 3/18/2010 at 12:09 PM EST