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
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

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    edited 27 October 2009 at 9:40PM
    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.
  • chappers
    chappers Posts: 2,988 Forumite
    cheers for that sorry 1991 was a typo meant to be 2001 but get the jist that my figures are correct.
    Cheers for that
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

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

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.