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  • FIRST POST
    • jus18
    • By jus18 12th Jun 17, 12:40 PM
    • 9Posts
    • 2Thanks
    jus18
    Capital gains tax on selling property
    • #1
    • 12th Jun 17, 12:40 PM
    Capital gains tax on selling property 12th Jun 17 at 12:40 PM
    Hi all, can anyone give me some advice please ?

    I let out a flat which I am looking to sell, I live with my BF in his house and we are looking to buy a house together, so would I be liable for capital gains tax if I sell this flat ? Ideally I would like to avoid paying CG if possible as I need the money for the deposit. So if this is the case how can I ensure I won't have to pay this ?

    Thanks for all advice given
Page 1
    • scottishblondie
    • By scottishblondie 12th Jun 17, 12:51 PM
    • 1,974 Posts
    • 1,253 Thanks
    scottishblondie
    • #2
    • 12th Jun 17, 12:51 PM
    • #2
    • 12th Jun 17, 12:51 PM
    More details are needed. For starters:
    • How long have you owned the property
    • How long has the property been rented
    • How much did you buy the property for
    • How much is the property worth now
    • jus18
    • By jus18 12th Jun 17, 12:59 PM
    • 9 Posts
    • 2 Thanks
    jus18
    • #3
    • 12th Jun 17, 12:59 PM
    • #3
    • 12th Jun 17, 12:59 PM
    Hi there, i've had the flat for about 10 years, it's been rented for 5 years, I bought it for £80k and it's worth £105k now, thanks.
    • Pixie5740
    • By Pixie5740 12th Jun 17, 1:10 PM
    • 11,103 Posts
    • 15,377 Thanks
    Pixie5740
    • #4
    • 12th Jun 17, 1:10 PM
    • #4
    • 12th Jun 17, 1:10 PM
    The forum has numerous examples of CGT calculations available. Try this one of for size and then post your working.

    If you owe CGT you owe it, there isn't a way around it.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • jus18
    • By jus18 12th Jun 17, 1:12 PM
    • 9 Posts
    • 2 Thanks
    jus18
    • #5
    • 12th Jun 17, 1:12 PM
    • #5
    • 12th Jun 17, 1:12 PM
    Thanks for that Pixie - trying to work out if I will owe it first
    • bob bank spanker
    • By bob bank spanker 12th Jun 17, 1:12 PM
    • 538 Posts
    • 1,038 Thanks
    bob bank spanker
    • #6
    • 12th Jun 17, 1:12 PM
    • #6
    • 12th Jun 17, 1:12 PM
    To give meaningful advice you would need to post the figures with dates (months are acceptable to HMRC, not years), however at first glance it is very unlikely you would have to pay any CGT.
    • Pixie5740
    • By Pixie5740 12th Jun 17, 1:13 PM
    • 11,103 Posts
    • 15,377 Thanks
    Pixie5740
    • #7
    • 12th Jun 17, 1:13 PM
    • #7
    • 12th Jun 17, 1:13 PM
    Thanks for that Pixie - trying to work out if I will owe it first
    Originally posted by jus18
    You will only know that by doing the calculation.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • jus18
    • By jus18 12th Jun 17, 1:22 PM
    • 9 Posts
    • 2 Thanks
    jus18
    • #8
    • 12th Jun 17, 1:22 PM
    • #8
    • 12th Jun 17, 1:22 PM
    To give meaningful advice you would need to post the figures with dates (months are acceptable to HMRC, not years), however at first glance it is very unlikely you would have to pay any CGT.
    Originally posted by bob bank spanker
    Thanks Bob - just want to double check I am doing the right thing here as would otherwise probably hold onto the property if likely to have to pay this
    • bob bank spanker
    • By bob bank spanker 12th Jun 17, 1:23 PM
    • 538 Posts
    • 1,038 Thanks
    bob bank spanker
    • #9
    • 12th Jun 17, 1:23 PM
    • #9
    • 12th Jun 17, 1:23 PM
    Thanks Bob - just want to double check I am doing the right thing here as would otherwise probably hold onto the property if likely to have to pay this
    Originally posted by jus18
    Really? Don't let the tax tail wag the dog. If you had to pay CGT it would be very, very low. Remember, is only charged on the gain, not the sale price.


    Would you decline extra hours at work because you have to pay tax on them?
    • Pixie5740
    • By Pixie5740 12th Jun 17, 1:36 PM
    • 11,103 Posts
    • 15,377 Thanks
    Pixie5740
    Thanks Bob - just want to double check I am doing the right thing here as would otherwise probably hold onto the property if likely to have to pay this
    Originally posted by jus18
    Rather than face a potential CGT bill you'd face a definite additional 3% SDLT bill?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • macca1974
    • By macca1974 12th Jun 17, 1:40 PM
    • 213 Posts
    • 185 Thanks
    macca1974
    Assuming that you are a basic rate tax payer. You first need to calculate the gain.

    So based on your figures £105K - £80K = £25K. You can also discount a chunk of the gain for when you lived in the property plus an additional period of time. This is all done by the month so use the calculator. But....Even if you only were able to knock off 50% of the gain, this would reduce it down to £12.5K. You would also be able to take off your selling costs which will probably be £1K-£2K. So I suspect that you will have a gain that is below the annual CGT exemption that is £11,300 this year. So no tax to pay. But you would need to work out the numbers properly yourself.

    Also (and I've not needed to look into this in detail), you may well pay far more in stamp duty on your new house if you don't sell the flat (3% extra I think).
    • 00ec25
    • By 00ec25 12th Jun 17, 1:54 PM
    • 5,347 Posts
    • 4,691 Thanks
    00ec25
    Assuming that you are a basic rate tax payer. You first need to calculate the gain.

    So based on your figures £105K - £80K = £25K. You can also discount a chunk of the gain for when you lived in the property plus an additional period of time. This is all done by the month so use the calculator. But....Even if you only were able to knock off 50% of the gain, this would reduce it down to £12.5K. You would also be able to take off your selling costs which will probably be £1K-£2K. So I suspect that you will have a gain that is below the annual CGT exemption that is £11,300 this year. So no tax to pay. But you would need to work out the numbers properly yourself.

    Also (and I've not needed to look into this in detail), you may well pay far more in stamp duty on your new house if you don't sell the flat (3% extra I think).
    Originally posted by macca1974
    you have forgotten that letting relief is also available

    with only a 25k gain and 50% PRR and LR being available, plus the personal allowance, it would be impossible for there to be a net taxable gain as shown in the example calculation linked at #4 already mentioned by Pixie
    Last edited by 00ec25; 12-06-2017 at 1:56 PM.
    • jus18
    • By jus18 12th Jun 17, 2:17 PM
    • 9 Posts
    • 2 Thanks
    jus18
    To be honest I hadn't considered stamp on the next property only because we haven't looked yet, I was more worried about what I would have to pay on this which given the calculation is nothing so that's a comfort to know, so it would make sense to sell now, now depends on whether it will actually sell !
    • 00ec25
    • By 00ec25 12th Jun 17, 3:09 PM
    • 5,347 Posts
    • 4,691 Thanks
    00ec25
    To be honest I hadn't considered stamp on the next property only because we haven't looked yet, I was more worried about what I would have to pay on this which given the calculation is nothing so that's a comfort to know, so it would make sense to sell now, now depends on whether it will actually sell !
    Originally posted by jus18
    have you actually done the calculation yet?

    Simply taking my comment at face value will not help you complete your tax return. And yes, despite probably no tax, you will need to complete the CGT pages of your tax return for the year in which you do sell because the rule is where you are already required to notify tax (you have rental income) you must declare your CGT, even if zero to pay. So you need to understand the calculation!
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