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  • FIRST POST
    • yorkshire_lass
    • By yorkshire_lass 11th Oct 16, 9:16 AM
    • 30Posts
    • 29Thanks
    yorkshire_lass
    CGT calculation on what used to be a shared ownership property
    • #1
    • 11th Oct 16, 9:16 AM
    CGT calculation on what used to be a shared ownership property 11th Oct 16 at 9:16 AM
    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.
Page 1
    • Wayne O Mac
    • By Wayne O Mac 11th Oct 16, 4:53 PM
    • 116 Posts
    • 143 Thanks
    Wayne O Mac
    • #2
    • 11th Oct 16, 4:53 PM
    • #2
    • 11th Oct 16, 4:53 PM
    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)
    Last edited by Wayne O Mac; 11-10-2016 at 4:56 PM.
    • purdyoaten2
    • By purdyoaten2 11th Oct 16, 6:53 PM
    • 473 Posts
    • 207 Thanks
    purdyoaten2
    • #3
    • 11th Oct 16, 6:53 PM
    • #3
    • 11th Oct 16, 6:53 PM
    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)
    Originally posted by Wayne O Mac
    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.
    Last edited by purdyoaten2; 11-10-2016 at 6:58 PM.
    purdyoaten lost his password
    • yorkshire_lass
    • By yorkshire_lass 13th Oct 16, 4:55 PM
    • 30 Posts
    • 29 Thanks
    yorkshire_lass
    • #4
    • 13th Oct 16, 4:55 PM
    • #4
    • 13th Oct 16, 4:55 PM
    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.
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