Capital Gains Tax calculation Help

beancounter1968

Hi

Could anyone please help with a tax calculation?

What would be the CGT on the sale of a second home...
Proceeds £140,000
Purchase Cost (1987) 26,500
Extension 1 (1988) 5,000
Extension 2 (1995) 10,000

No other gains in the year.

I seem to remember that you could uplift the cost of an asset to take into account inflation etc but cannot find the table.

Any help greatly appreciated.

Thanks

Phil

CLAPTON

assuming you have never actually lived there as you principal residence and you are the sole owner

calculation is

gain = 140,000 - 5,000 - 10,000 - buying/selling costs (lets say 2,000) so gain is 123,000

you have a cgt allowance of 10,100 so net gain is 112,000

you pay tax at either 18 % or 28% depending upon your income level so between 20,160 and 31,600

indexation relief etc has all been abolished

if you have a wife you can gift half the house to her and she can use her 10,100 cgt allowance

beancounter1968

CLAPTON wrote: »

assuming you have never actually lived there as you principal residence and you are the sole owner

calculation is

gain = 140,000 - 5,000 - 10,000 - buying/selling costs (lets say 2,000) so gain is 123,000

you have a cgt allowance of 10,100 so net gain is 112,000

you pay tax at either 18 % or 28% depending upon your income level so between 20,160 and 31,600

indexation relief etc has all been abolished

if you have a wife you can gift half the house to her and she can use her 10,100 cgt allowance

Thank you. I take it that the original cost of 26,500 is also allowed to reduce the gain?

mlz1413

beancounter1968 wrote: »

Hi

Could anyone please help with a tax calculation?

What would be the CGT on the sale of a second home...
Proceeds £140,000
Purchase Cost (1987) 26,500
Extension 1 (1988) 5,000
Extension 2 (1995) 10,000

No other gains in the year.

I seem to remember that you could uplift the cost of an asset to take into account inflation etc but cannot find the table.

Any help greatly appreciated.

Thanks

Phil

Proceeds of Sale (this is sell price less any costs/fees) 140,000
Purchase Cost (26,500) This should include any costs or fees too
Improvements ( 5,000)
Improvements (10,000)
Total cost of assets (41,500)
Profit on disposal £98,500
Less Annual Allowance (10,100)
so CGT on £88400 at 18% = £15,912
please check if you need to pay at this rate or the higher 28%

If you are a business you maybe able to receive Entrepreneurs’ Relief or Roll over relief if you are re-investing.

If you have ever lived in the property then further reductions could be available to you.

CLAPTON

beancounter1968 wrote: »

Thank you. I take it that the original cost of 26,500 is also allowed to reduce the gain?

oh dear

yes of course the 26,500 should have been deducted just as mlz has shown above