Any useful advice on sorting out my mortgage mess please

silvercar

Silvercar thank you thats very kind. I do believe I will have to pay quite a lot as I've made a good profit. (considering how much I paid) One was purchased in 1997 for 14k, hope to sell for 50k The other was purchased approx 2000 for 18k and worth 50k however this one could go anywhere between 40k and 60k as its subject to the council regeneration scheme. We are fighting to get a fair price however its had an arson attack on it since its been empty. It was valued at 69k before the regeneration order

I'll make some asumptions first, that you can correct.

If we just look at the highlighted one. I'm assuming that you have never lived in it as your principal private residence (if you have the tax will be reduced). I'm also assuming buying costs of say £1000, selling costs of say £2000, including estate agent fees and no improvement costs. (improvements are not maintenance but stuff that actually improves the property, so would include fitting a kitchen for the first time but not replacing a worn out fitted kitchen.)

50-14-1-2=33k capital gain.

Luckily its held in joint names so that is 16.5k each. You each have a CGT allowance of currently 9.6k if not used elsewhere, so the gain reduces to 6.9k each. CGT tax is 18% So 6,900 x 18% x 2 =£2,484 total tax. You both include it in your tax return for the year in question and pay the tax by the end of January the year after the tax year end. So sell between 6 April 2009 and 5 April 2010 and you include it in the 2009-10 tax return and pay the tax by end January 2011.

Obviousl if another property gets sold in the same tax year, you haven't got any more CGT allowance to use so the figure would be higher (£5,940 here if no allowances).

The other was purchased approx 2000 for 18k and worth 50k however this one could go anywhere between 40k and 60k as its subject to the council regeneration scheme. We are fighting to get a fair price however its had an arson attack on it since its been empty.

I hope you can claim on insurance for the arson attack!

If you did sell for 50k the gain is around 30k after buying and selling costs. With no CGT allowances your combined CGT bill would be £5,400. If you had the CGT allowances to use it would reduce to £1,944.

lavenderlady

Hi Chivers. Hmmm so it was a complete waste then putting the money in. As you say, the excess has just put the saving back up again. I hope Barclays ring me tomorrow to start the investigation. One good thing is they must keep records of when people rang so hopefully they can see that i've kept asking for the amount to be sorted out.

Hi Silvercar. Thank you thats really kind of you. Its not as bad as I thought it was going to be. To be honest its surely going to be better to lose that money to the tax man and put the capital into my mortgage account. I just have to hope they sell soon.

your assumptions are all correct by the way

One thing. no I can't claim on insurance... they won't pay out on malicious damage. But it gets worse. Now the insurance has come to the end of its time they won't re-insure me. I've rang every insurer I can think of but no no joy. I've even written to Margaret Beckett for help. The council have ran out of money and can't purchase it. We now have to see whether they can afford it in this next tax year. Again they have not been awarded enough to go round. Anyway thats another story...