Need help with CGT please.

Janey51

In 1989 I bought a house for £34,500 with a mortgage of £32,775 which I lived in until 1998.
I then moved out to live with my future husband in a rented property and left my son to live in the house rent free.
In 2002 my son bought his own house. My husband and I are very happy where we are so decided to rent the house to students. I put my husband on the mortgage and we changed to a buy to let. The house was valued at that time at £40000. The BTL mortgage is with a different mortgage lender than my original mortgage.
We had students renting until this year. Each year the tenancy was for 41 weeks out of 52.
To clear our debts we intend to sell this house which we anticipate to be worth approx £100,000.
I have got a headache trying to work out how we stand for CGT.Even though we are joint owners of the house, I have always filled in the tax return with me taking full responsibility for paying the extra tax from the rental.
Am I reading things right that we can claim double CGT relief? And that some relief is due because I did once live in the house as my PPR although that was with a different mortgage provider?
I envy anyone who can sort out figures...give me a garden to weed anytime
Thanks a lot

Ian_W

I'm delaying weeding the garden 'cos it's too damned hot!!

I only know the basics and suggest you seek professional advice. I don't know how you go on about claiming two personal allowance but the good new is it may well not matter as I doubt you've a taxable gain anyway.

Your gain is the selling price less the purchase price [+ buying and selling costs and any capital improvements to the house]. As it was your principal private residence [PPR] for 9yrs you can claim PPR relief for those yrs plus the last 3yrs ownership whatever it was used for. As you owned the house for 17yrs, your tax liability will be based on 5/17th's of your gain. You can also claim letting relief of the same amount as your PPR up to a max of £40K. There's a HMRC helpsheet which explains these at:
https://www.hmrc.gov.uk/pdfs/2003_04/capital_gains/ir283.pdf

In addition you'll be elligable to 25/30% taper relief and indexation relief which similarly reduces your tax liability the longer you own a property. So whether you'll need both personal allowances is IMO very doubtful.

HTH but do check this with an accountant.

EDIT to add, who you had the mortgage with is immaterial I believe.

Jorgan_2

As Ian says, speak to an accountant. I heard of somebody who had lived in their property for a number of years before renting it out. When the time came to sell they were facing a CGT bill of about £80k, they employed an accountant who got the bill down to about £12k & charged about £2k, thats money saving.

Janey51

Thanks to Jorgan and Ian W for the replies. Just need to find a friendly accountant who might be willing to barter advice for a spot of weeding:D