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selling a buy to let
dickie25
Posts: 3 Newbie
I've owned my buy to let property since 2003. after living in it for 2 years, I rented it out. Will i have to pay capital gains tax on it when i sell it next year? My estimated profit before any tax is around 30,000...
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If you sell it more than three years after moving out of it, then you have to pay CGT on your profit at 18%.Everything that is supposed to be in heaven is already here on earth.
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Surely, though, the profit is time-apportioned?No reliance should be placed on the above! Absolutely none, do you hear?0
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I've owned my buy to let property since 2003. after living in it for 2 years, I rented it out. Will i have to pay capital gains tax on it when i sell it next year? My estimated profit before any tax is around 30,000...
You are selling next year and you are working out how much profit you expect to clear. Welcome stranger. Which planet do you hail from?0 -
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"The penguin thanks the chimp" he he,
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4016313?cids=Google_PPC&cre=Money0 -
I've owned my buy to let property since 2003. after living in it for 2 years, I rented it out. Will i have to pay capital gains tax on it when i sell it next year? My estimated profit before any tax is around 30,000...
You take the selling price less the buying price and deduct your buying and selling costs and any costs of improvements (but not repair or maintenance).
I presume this is your 30,000 but if not adjust as neccesary.
The actual calculation is done in months, but to give you a rough idea:
6 years ownership, 2 as principal private residence plus the last 3 years of ownership = 5 years relief. So the gain is reduced by five-sixths, leaving one-sixth ie £5,000. This is well within your CGT allowance of £9,600 so there would be no CGT to pay.
If you had used your allowance elsewhere, you would also be eligible to letting relief as you let out what was your home. Letting relief is worth the the maximum of:
a) £40,000
b) the relief for PPR
c) the relief for the time it was let.
Looks like you will have no CGT to pay, though you should still declare the gain on your tax return.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Im selling the property to my sister for a bargin price. Hopefully thing wont go tits up and i will sell it to her at the price agreed.
This does change things slightly. Transactions between related parties are deemed to be at market value, rather than any reduced price deal. So you need to base your calculation on the price that could be achieved on the open market rather than the special favour you are giving your sister.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Apparently not. I think that the profit can be offset against inflation over the period. But you only get one Capital Gains Tax exemption allowance per year, which does not carry over.Surely, though, the profit is time-apportioned?
Essentially, the rich, who can move assets around can get this exemption every year, but the less well off who might only have a single asset over many years take a much heavier CGT hit on smaller assets.After the uprising of the 17th June The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee Stating that the people
Had forfeited the confidence of the government And could win it back only
By redoubled efforts. Would it not be easier In that case for the government
To dissolve the people
And elect another?0 -
I meant it's time-apportioned in the way Silvercar explained above.No reliance should be placed on the above! Absolutely none, do you hear?0
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