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I purchased a property in 1997 for 100,00 and am now selling…

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I purchased a property in...
I purchased a property in 1997 for £100,00 and am now selling it for £200.00 My earnings are in the region of £16,000 per year. I am aged 70. The capital gains on my property are £100,00. with the new budget last week will I be paying capital gains tax at 18% or would it be at 28% (as this would take my earnings for the year that I sell into the high rate bracket. ) How much would I have to pay after I have deducted my £10.000 allowance?
Submitted: 8 years ago.Category: UK Tax
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Answered in 29 minutes by:
6/24/2010
UK Tax Professional: Sam, Accountant replied 8 years ago
Sam
Sam, Accountant
Category: UK Tax
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Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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Hi

Thanks for your question

Assuming that you have never lived in this property - then you would have a gain of £100,000 as you advise - however you may not be aware that you can use the value of the property at 31/03/1982 - due to rebasing - which will lessen your gain a little
From this revised gain you can deduct the legal costs to buy and sell and the costs of any major repairs and renovations.

As to what rate of tax you will pay - this will be reviewed as follows.

As you a basic rate taxpayer for income tax purposes, some of the gain (after the annual exemption allowance of £10,100 is taken into account) will be at 18% and the balance at 28%

As you have used £16,000 of the lower rate band and there is £43875 available - the difference of £27875 will allow this amount of the gain to be charged at 18% and the balance at 28%

Thanks

Sam
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