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    • Sarahstew
    • By Sarahstew 28th Oct 16, 9:16 PM
    • 2Posts
    • 0Thanks
    Sarahstew
    Capital gain tax help
    • #1
    • 28th Oct 16, 9:16 PM
    Capital gain tax help 28th Oct 16 at 9:16 PM
    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
Page 1
    • Keep pedalling
    • By Keep pedalling 28th Oct 16, 11:10 PM
    • 3,574 Posts
    • 3,846 Thanks
    Keep pedalling
    • #2
    • 28th Oct 16, 11:10 PM
    • #2
    • 28th Oct 16, 11:10 PM
    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
    • By CLAPTON 28th Oct 16, 11:34 PM
    • 41,655 Posts
    • 30,687 Thanks
    CLAPTON
    • #3
    • 28th Oct 16, 11:34 PM
    • #3
    • 28th Oct 16, 11:34 PM
    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
    Originally posted by Sarahstew
    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.
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    • roger_c
    • By roger_c 29th Oct 16, 8:29 AM
    • 304 Posts
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    roger_c
    • #4
    • 29th Oct 16, 8:29 AM
    • #4
    • 29th Oct 16, 8:29 AM
    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.
    • Wayne O Mac
    • By Wayne O Mac 29th Oct 16, 11:50 AM
    • 206 Posts
    • 259 Thanks
    Wayne O Mac
    • #5
    • 29th Oct 16, 11:50 AM
    • #5
    • 29th Oct 16, 11:50 AM
    I'd be very surprised if you get the job-related accomodation exemption.
    • silvercar
    • By silvercar 29th Oct 16, 12:16 PM
    • 35,874 Posts
    • 151,073 Thanks
    silvercar
    • #6
    • 29th Oct 16, 12:16 PM
    • #6
    • 29th Oct 16, 12:16 PM
    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.
    • CLAPTON
    • By CLAPTON 29th Oct 16, 3:59 PM
    • 41,655 Posts
    • 30,687 Thanks
    CLAPTON
    • #7
    • 29th Oct 16, 3:59 PM
    • #7
    • 29th Oct 16, 3:59 PM
    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.
    Originally posted by silvercar
    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.
    EU tariff on agricultual product 12.2%
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    EU Clinical Trials Directive stops medical advances
    • Keep pedalling
    • By Keep pedalling 29th Oct 16, 6:24 PM
    • 3,574 Posts
    • 3,846 Thanks
    Keep pedalling
    • #8
    • 29th Oct 16, 6:24 PM
    • #8
    • 29th Oct 16, 6:24 PM

    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.
    Originally posted by silvercar
    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.
    • Wayne O Mac
    • By Wayne O Mac 30th Oct 16, 10:39 AM
    • 206 Posts
    • 259 Thanks
    Wayne O Mac
    • #9
    • 30th Oct 16, 10:39 AM
    • #9
    • 30th Oct 16, 10:39 AM
    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.
    • tiger17bear
    • By tiger17bear 31st Oct 16, 3:39 PM
    • 8 Posts
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    tiger17bear
    Gains tax on land
    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
    • minnsy229
    • By minnsy229 3rd Sep 17, 6:58 PM
    • 14 Posts
    • 0 Thanks
    minnsy229
    Right to buy
    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.
    • minnsy229
    • By minnsy229 5th Sep 17, 8:27 AM
    • 14 Posts
    • 0 Thanks
    minnsy229
    Sorry for that, it would not allow me to create a new thread for some reason!

    There were no legal instructions in place, so therefore my father's share would pass over to my mother automatically I assume. Who defines the share as well? because as far as I'm concerned, although it is joint ownership I do not have a share as such, because the house is now my mother's.

    How would I start to inform HMRC, or would I have to wait until it is sold?
    • j45p41
    • By j45p41 12th Sep 17, 9:44 AM
    • 4 Posts
    • 0 Thanks
    j45p41
    Property bought for parents - do I have to pay CGT

    First of all I have to say that its great that forums like this exist and it is great that there are people out there willing to help others.

    I bought a property for my mum and dad under my own name back in 2004. Concurrently I owned another property. As they are getting older I now want to move them closer to me - I now realise that I have to pay CGT on one of these properties because I can only nominate one as my main residence. Considering the house was lived in by mum and dad is it possible for one of them to declare it as their main residence so that I can use all the money for the next purchase?
    • purdyoaten2
    • By purdyoaten2 12th Sep 17, 10:08 AM
    • 662 Posts
    • 291 Thanks
    purdyoaten2
    Property bought for parents - do I have to pay CGT

    First of all I have to say that its great that forums like this exist and it is great that there are people out there willing to help others.

    I bought a property for my mum and dad under my own name back in 2004. Concurrently I owned another property. As they are getting older I now want to move them closer to me - I now realise that I have to pay CGT on one of these properties because I can only nominate one as my main residence. Considering the house was lived in by mum and dad is it possible for one of them to declare it as their main residence so that I can use all the money for the next purchase?
    Originally posted by j45p41
    Main residence or not it is not their property. Ironically you would have been totally exempt if you had done exactly as you did prior to 1988 but I am afraid that you will be liable for CGT without any reliefs other than the annual exemption. Hindsight is wonderful but, giving them the money to buy the property would have been the correct thing to do in this instance in order to avoid CGT although the IHT position (yours and theirs) would have played a major part in this decision.
    Last edited by purdyoaten2; 12-09-2017 at 10:12 AM.
    purdyoaten lost his password
    • j45p41
    • By j45p41 12th Sep 17, 10:37 AM
    • 4 Posts
    • 0 Thanks
    j45p41
    Thank you purdyoaten2 for your kind reply.

    It is a pity but I guess they are the rules.

    Another thought - Do you think I may have an option to offset some of the liability with my wife? I was not married the time of the purchase but when I sell it I will be - so could I gift it to her as she is not working and is lower rate tax payer?
    • 00ec25
    • By 00ec25 12th Sep 17, 4:52 PM
    • 4,770 Posts
    • 4,147 Thanks
    00ec25
    Thank you purdyoaten2 for your kind reply.

    It is a pity but I guess they are the rules.

    Another thought - Do you think I may have an option to offset some of the liability with my wife? I was not married the time of the purchase but when I sell it I will be - so could I gift it to her as she is not working and is lower rate tax payer?
    Originally posted by j45p41
    you could but equally HMRC have the power to ignore such a transfer if the only reason it was done was to reduce a tax liability

    you would need to make your wife a co owner a very considerable time before the property even begins to be marketed for sale in order to reduce that risk. At least a year plus as a start point, but longer would be better.

    So the question is how soon do you need to sell?
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