Capital Gains Help please

BernadetteN

Hello eveyone,
I was wondering if anyone could help me work out CGT on our property, I've done a bit of research but want to know if I have fully understood everything.

We bought our house in joint names in October 1998 for 92k
We lived in our house as our only residence until August 2008, 9 years and 10 months.
We now live elsewhere and rent out this house still, right now that makes 2 years and 2 months.We would probably be able to sell for 230k. That would be a gain of 230-92 = 138k.
If we were to sell the house right now, how do we work out the CGT?

So we have lived in the house 9 10/12 out of 11 11/12 years, that's 87.5% main home versus 12.5% rented privately and paying tax on.

Do we reduce the possible 138k gain in proportion to how long we lived there as our own property, ie reduce the gain to 12.5%? That would be 17.25k gain?? Or can we reduce the gain by only a certain number of years?

This private residence relief of 40k per owner, would that mean if our gain was over 2 * 40k = 80k per year, we would then start paying CGT only on any gain of over 80k per year and nothing if the gain is less than 80k per year?

The annual exempion 2010-2011 of 10k, is that 10k each owner, so 10k * 2 = 20k for us? So if a gain is over 20k, we only pay CGT on that part over 20k? Or is it 10k per property?

Sorry plenty of questions, just need to be sure of what we are doing, we would in fact like to keep renting for a few more years, but if in the end it means any profit on the rent is negated by CGT, it is not going to be worth continuing to rent (that's all assuming the property market stays steady).

Thanks if anyone can help

Gertie_Walker

The period Oct 98 - Aug 08 is exempt, as are the final 3 years of ownership. Therefore if you sold before Aug 2011, there would be no CGT. You work the exempt period out by months, not %ages.
If you sold after that, the £40k letting exemption would be applied to any remiaining gain.