Capital gain tax help

Getting really confused with regards to residential relief and likely CGT if I sell - would welcome any advice.

I bought a property in 2001 for 58500

I married in aug 2002 and moved with my husband who was in the armed forces. The house remained in my name and rented out since oct 2002. The was our main residence although I was sole owner and responsible for all tax. Until we purchased our current home in aug 2013.

We are looking to sell property to our daughter the house was valued 130k but we would look to sell at 124k to enable her to avoid paying Stamp duty.

I pay basic rate tax.

Any advice or guidance on how much CGT likely to pay and how I evidence main residence and fill out self assessment- TBH any advice would be much appreciated
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Comments

  • Your gain needs to be calculated on the actual value not the price your daughter is paying so that is a gain of £71,500.

    You only lived in the house for 1 year so your relief will only apply for that period plus the last 18 months of ownership which will reduce the taxable gain by approx £12,000 and letting relief should double that. So with your personal allowence of £11,100 your are left with a taxable gain of around £36,500 which at 18% equates to a tax bill of £6570, but depending on your actual income some of the gain will actually be taxed at 28%, so will be higher than that.

    You may be able to reduce this buy selling the house in two stages so that you can use 2 years of personal allowance as well as reducing the amount you pay at 28%.
  • CLAPTON
    CLAPTON Posts: 41,865
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    Sarahstew wrote: »
    Getting really confused with regards to residential relief and likely CGT if I sell - would welcome any advice.

    I bought a property in 2001 for 58500

    I married in aug 2002 and moved with my husband who was in the armed forces. The house remained in my name and rented out since oct 2002. The was our main residence although I was sole owner and responsible for all tax. Until we purchased our current home in aug 2013.

    We are looking to sell property to our daughter the house was valued 130k but we would look to sell at 124k to enable her to avoid paying Stamp duty.

    I pay basic rate tax.

    Any advice or guidance on how much CGT likely to pay and how I evidence main residence and fill out self assessment- TBH any advice would be much appreciated

    i don't know the answer, but people that live in job related accommodate can benefit from special generous terms.
    as your spouse is in the army that may apply to you : worth getting expert advice.
  • roger_c
    roger_c Posts: 320
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    Have to second what Clapton says here. From HMRC's website on CGT private residence relief, extract on job-related accom.:-

    "Job-related accommodation
    If you live in accommodation that is job-related and you also own a dwelling house that you intend to occupy as your only or main residence, the dwelling house you intend to occupy is treated as actually being occupied by you as a residence during the period in which you intend to occupy it, even if you never actually live there. This means that you may nominate that residence as your only or main residence and get relief on the whole or a part of the gain.

    Please see the paragraph headed ‘Only or main residence’ on page 3. If your intention to live in the dwelling house ends, then the dwelling house is no longer treated as your residence.

    Accommodation is job-related if it is exempt from Income Tax for the
    reasons set out in Helpsheet 202 Living accommodation.

    This extension of Private Residence Relief also applies if you are
    self-employed. The job-related accommodation must be provided by another person under the terms of a contract that requires you to live in the property and carry on a particular trade. This extension only applies to residence in such accommodation on or after 6 April 1983. If you need help, ask us."

    Worth getting some professional advice here.
  • I'd be very surprised if you get the job-related accomodation exemption.
  • silvercar
    silvercar Posts: 46,865
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    One problem in declaring it as your home under the job-related exemption is that it isn't you that was required to be in the armed forces but your husband. It may have been worth putting the property in joint names.

    You could transfer to joint names now, to gain the benefit of 2 lots of CGT allowance. Whether you gain overall is something to calculate as your husband won't ever have lived there as his PPR so won't gain PPR relief.
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  • CLAPTON
    CLAPTON Posts: 41,865
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    silvercar wrote: »
    One problem in declaring it as your home under the job-related exemption is that it isn't you that was required to be in the armed forces but your husband. It may have been worth putting the property in joint names.

    You could transfer to joint names now, to gain the benefit of 2 lots of CGT allowance. Whether you gain overall is something to calculate as your husband won't ever have lived there as his PPR so won't gain PPR relief.

    I admit to knowing little about job related exemption, but I vaguely remember about a soldier being eligible after buying a property whilst in the army but never lived there even after leaving : the exemption worked because he 'intended' to live there.
  • Keep_pedalling
    Keep_pedalling Posts: 16,439
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    silvercar wrote: »

    You could transfer to joint names now, to gain the benefit of 2 lots of CGT allowance. Whether you gain overall is something to calculate as your husband won't ever have lived there as his PPR so won't gain PPR relief.

    Not sure if that would help, if the husband never lived there I don't think he could claim any residential, or letting relief on his share.

    I think professional advise is required in this case.
  • The job-related exemption is very hard to get. The accommodation has to be provided:

    (a) for the proper performance of the duties of the employment;

    (b) because it is customary and for the better performance of the duties of employment; and

    (c) because of security reasons.

    It's there to cover people like (for example) lighthouse-keepers, and absolutely will not cover someone living on base.
  • Quick one about calculations. Thinking of selling a small field jointly inherited with my 2 siblings. Am I right to calculate tax like this: (value now- value when inherited) times 1/3 share, then less personal allowance and times 28% tax rate ? Assuming no other capital gains for the year
    IE (100k-50k)/3 =16.6k less 11.1k allowance = 5.5k times tax rate circa 1.5k tax to pay each.
    Thanks
  • Hi there

    I'm hoping someone may be able to help me. Sorry if this isn't posted in the correct place, as it is my first attempt!

    I purchased a right to buy property from the council with my mum and dad in 2005. I lived in the property with my parents until 2014. My father then died in 2015 and currently the house is to be sold by my mum as she is moving to another area of the country. Would I be liable for any part of this process? The house is registered with the land registry in all three names, and the mortgage was also in all three names (although essentially the payments came out of my bank account, up until the balance was cleared several years ago).

    Any ideas/advice would be greatly appreciated.
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