We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
one for you CGT experts
Options

chappers
Posts: 2,988 Forumite
in Cutting tax
One of my friends has split up with his girlfriend and he wants to sell one of their properties and split the equity so he can start up again on his own.
Now shee says she has taken some advice and that they will be liable for £25K CGT.
Now i have worked through this and don't believe that is true.
The details are as follows
They bought the house in Februray 1991 for £125,00 and lived in it as their own residence until 2005. They then bought another property and rented out the original house until now, my friend has now moved back into it.
If they were to sell it next year for £240k what would the CGT be I think there wouldn't be any based on the following
Purchase price £125,000
sale price £24,000
Taxable gain £115,000
Residential relief 7/9 * £115,00=£89,444
letting relif £40,000
personal allowances £10,100 * 2= £20,200
Total relief £149,644
Is this correct
Cheers
Gareth
Now shee says she has taken some advice and that they will be liable for £25K CGT.
Now i have worked through this and don't believe that is true.
The details are as follows
They bought the house in Februray 1991 for £125,00 and lived in it as their own residence until 2005. They then bought another property and rented out the original house until now, my friend has now moved back into it.
If they were to sell it next year for £240k what would the CGT be I think there wouldn't be any based on the following
Purchase price £125,000
sale price £24,000
Taxable gain £115,000
Residential relief 7/9 * £115,00=£89,444
letting relif £40,000
personal allowances £10,100 * 2= £20,200
Total relief £149,644
Is this correct
Cheers
Gareth
0
Comments
-
Its worked out in months really but
they have owned the property for 18 years
they lived there for 14 years
so PRR is 14 +3 years (last three years ) i.e. 17 in total
so allowance of 17/18
so 115,000 x 17/18 is exempt = 108,611
plus letting relief of the lesser of 4/18 or 40,000 ie. 25,555
so nothing due.0 -
cheers for that sorry 1991 was a typo meant to be 2001 but get the jist that my figures are correct.
Cheers for that0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.8K Banking & Borrowing
- 253K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.8K Work, Benefits & Business
- 598.6K Mortgages, Homes & Bills
- 176.8K Life & Family
- 257.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards