CGT on a buy to let .

ginger_nuts

I have one BTL . If I sold it at the moment I might make £25,000 /£30,000 .
I know I have £8,800 CG allowance .
I am a basic rate taxpayer ,will I still pay 40% tax on any profits or will i pay less.

Any help welcome

pchelpman

More details would pave the way to a better answer but, going on just the bare facts as stated, the position is this.

First you calcuate the gain (sale proceeds less costs of aquisition) THEN you reduce the gain by "taper relief", as appropriate, THEN deduct the annual CGT exemption from whatever is left.

You now have the "taxable" amount.

That amount is added to your other total taxable income and taxed accordingly.

Now .... this may push you into the highter rate wholly or in part or it may not. It will all depend on the level of your other total taxable income in the year of disposal.

Hope that helps. Post back of you need more assistance.

PCH

ginger_nuts

pchelpman wrote:

More details would pave the way to a better answer but, going on just the bare facts as stated, the position is this.

First you calcuate the gain (sale proceeds less costs of aquisition) THEN you reduce the gain by "taper relief", as appropriate, THEN deduct the annual CGT exemption from whatever is left /quote] Sorry but this has confused me even more . What is ment by taper relief .

pchelpman

"Taper relief" is a %age reduction in the gain depending on ...

(a) the nature of the aset; business or non-business and
(b) how many complete years you have owned the asset.

In essence the longer you own the asset the greater the reduction.

These give you all the basics ....

http://www.taxaccount.co.uk/taxes.html#CAPITAL%20GAINS ... for a "step by step" explanation

http://www.hmrc.gov.uk/leaflets/cgt1.htm ... for the Revenue's views.
(Taper relief is at section 6)

Hope this helps.

PCH