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bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 4207
Experience:  FCCA FCMA CGMA ACIS
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I would like to know roughly how much cgt i would have to

Customer Question

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: 1 year ago.
Category: UK Tax
Expert:  bigduckontax replied 1 year ago.

Hello, O am Keoth, one of the experts on Just Answer, and pleased to be able to help you with your question.

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.

Expert:  bigduckontax replied 1 year 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.