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5/10/2010
Sam, Accountant
Category: UK Tax
Satisfied Customers: 17,158
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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Thanks for your question
The gain is treated as having accrued evenly over the whole period of ownership so the difference in purchase price in 2002 and sale price in 2010
But you are given an exemption on private residence relief for the time you lived there May 2002 to June 2004 and the last 36 months of ownership -
Plus as this was your main residence, and you then went on to let out this property to tenants - then you also get private lettings relief which is the lesser of
1) the exempt amount when private residence relief has been applied
2) The amount left chargeable to capital gain tax after private residence relief has been applied OR
3) £40,000
The purchase of other property does not come into play at all - its the determination of what took place with this residence, and as it was let from June 2004 - it could no longer have been deemed to be your main residence.
I have added links re private residence relief and private lettings relief.
The gain should be declared to HMRC after 05/04/2011 (assuming the sale has gone through by then) and any capital gain tax due to be paid no later than 31/01/2012
THanks
Sam
Thanks for your question
The gain is treated as having accrued evenly over the whole period of ownership so the difference in purchase price in 2002 and sale price in 2010
But you are given an exemption on private residence relief for the time you lived there May 2002 to June 2004 and the last 36 months of ownership -
Plus as this was your main residence, and you then went on to let out this property to tenants - then you also get private lettings relief which is the lesser of
1) the exempt amount when private residence relief has been applied
2) The amount left chargeable to capital gain tax after private residence relief has been applied OR
3) £40,000
The purchase of other property does not come into play at all - its the determination of what took place with this residence, and as it was let from June 2004 - it could no longer have been deemed to be your main residence.
I have added links re private residence relief and private lettings relief.
The gain should be declared to HMRC after 05/04/2011 (assuming the sale has gone through by then) and any capital gain tax due to be paid no later than 31/01/2012
THanks
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 17,158
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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