CGT calculation on what used to be a shared ownership property
yorkshire_lass_2
Posts: 34 Forumite
in Cutting tax
Hi, I have a bit of a conundrum relating to the calculation of capital gains tax on what was originally a shared ownership property and wonder if anyone can help. I understand how to do a basic CGT calculation, including how to apply private residence relief and letting relief. What I'm not sure about is how to calculate the 'gross gain'. Here are the facts:
I purchased a 30% share in the property for £55,500 in 2008. At that time the full market value was £185,000.
I 'staircased' to full ownership in 2013, purchasing the remaining 70% share in the property for £154,000. The full market value at that time was £220,000 and I had benefited from the value growth on my 30% share. My total outlay on the property was therefore £209,500.
I moved out of the property in 2014 to live with my other half, and it has been tenanted ever since. A valuation earlier this year suggested the property is now worth significantly more than it was in 2013.
I may need to sell the property next year, hence keeping an eye on potential CGT liability. My question is, what do I use as the basis for calculating the gross gain? I understand it would normally be a straightforward equation between the original purchase price and the final selling price, but it's not quite so clear cut because for the first 5 years I only owned 30% of the property.
Does anyone have any suggestions? Thanks in advance.
I purchased a 30% share in the property for £55,500 in 2008. At that time the full market value was £185,000.
I 'staircased' to full ownership in 2013, purchasing the remaining 70% share in the property for £154,000. The full market value at that time was £220,000 and I had benefited from the value growth on my 30% share. My total outlay on the property was therefore £209,500.
I moved out of the property in 2014 to live with my other half, and it has been tenanted ever since. A valuation earlier this year suggested the property is now worth significantly more than it was in 2013.
I may need to sell the property next year, hence keeping an eye on potential CGT liability. My question is, what do I use as the basis for calculating the gross gain? I understand it would normally be a straightforward equation between the original purchase price and the final selling price, but it's not quite so clear cut because for the first 5 years I only owned 30% of the property.
Does anyone have any suggestions? Thanks in advance.
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Comments
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Who did you share the ownership with?
Edit: Doesn't matter, actually, since you used market value. Your gain is selling price less what you actually paid (less incidental costs etc)0 -
Wayne_O_Mac wrote: »Who did you share the ownership with?
Edit: Doesn't matter, actually, since you used market value. Your gain is selling price less what you actually paid (less incidental costs etc)
Almost - slightly under market value on the first purchase but, as you say, the important point is that market value may become the base cost, not what was paid. We need to know,therefore, from whom the shares were purchased.0 -
Hello, the shares were purchased from a housing association, on an affordable housing scheme. In both 2008 and 2013, the price I paid for the share I purchased was equivalent to the corresponding % of the market value of the property at that time. This is in accordance with the rules of the scheme. Therefore in neither instance was the price of the share I purchased under market value.0
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I would love to know how you dealt with this situation as I now have the same problem.0
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I have the same issue and am struggling to work out my CGT?0
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