Capital Gains Tax

Engeroosi

In May 2008 I had to move 90 miles away due to work, I decided to rent out my flat and rent in my new location to enable me to "suss out" the area. I got permission from my mortgage provider etc. I then bought a house in my new location with my partner in November 2008 and didn't sell my flat as I was tied into a tenancy contract with my tenant in the flat. The flat has been rented out since August 2008 now.

What I would like advice on is what the best way for me financially to avoid paying CGT?

All thoughts are welcome!:beer:

CLAPTON

when are you thinking of selling
as you have three years from may 2008 without being liable to cgt

Engeroosi

Not planning on selling as have a fixed mortgage on it for another 3 years. Took this out in Feb 2008. Is it worth overpaying on this mortgage or am I better off investing money into my mortgage for my new house?

CLAPTON

the cgt is based on the following

gross gain = selling price minus buying price less buying /selling costs

the monthly gain is the gross gain / months of ownership


the notional gain during the period of residence is tax free plus the last three years

plu syou get letting relief ; the less of of 40,000 or the notional gain during that period

after that you have a cgt allowance 10,100 per owner (so joint owners each get 10,100)

so you probably pay nothing but

then you get taxed at 18%

but is may change on Tuesday