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Capital Gains Tax????
Steggsy
Posts: 1 Newbie
A girl I know lived in her property for 2 years, she then went to live with her boyfriend and rented out the property. It has been rented out now for 15 years, the last residents recently moved out and this girl is thinking of selling the property. There is no mortgage outstanding and the property has been valued at £90K (bought for £30K). She has heard that if she sold it now then she would be liable to pay 25% 'Capital Gains Tax' on the profit, is this correct, if so what options does she have to avoid this?
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She would get some relief from capital gains tax because she did live in the property. this would be the 2 years it was her home plus the last 3 years of wonership. you can also allow for the buying and selling expenses.
Allowing 2k for expenses, so 5 of the 17 years of ownership would qualify for relief. so the 58k profit is whittled down to under £41k. then there is tapering relief for the fact she has owned it for so long and also lettings relief of upto £40k as she let a property that was her home. Looks like there will be no tax to pay. As there is a chargeable gain she should include the figures in her tax return.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
silvercar, does the period in which you live in a property as described above matter ? - ie whether you live there at the beginning,in the middle, or at the end of ownership ?0
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duplicate = sorry0
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The letting relief will not be the full 40k. Letting relief will be the lower of 40K and the amount that is exempt for principle private residence relief. Therefore it is likely to be capped at another 5/17 of the gain.0
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clutton wrote:silvercar, does the period in which you live in a property as described above matter ? - ie whether you live there at the beginning,in the middle, or at the end of ownership ?
it matters in that it is the last 3 years of ownership that you get exemption for plus any other time you lived in it as your PPR. So if your 1 year living somewhere was not in the last 3 years you would get a total of 4 years, if it was in the last 3 years you get 3 years.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Dear all, Is there any truth in that you can only pay tax on any 3 years gain, so the tax would only be the gain in the property price from 3 years ago until now?????????? I dont assume this be true but have heard it somewhere!!?!?!?!0
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No there's no truth in that, someone is getting confused with the 3 year exemption for PPRs.ds1980 wrote:Dear all, Is there any truth in that you can only pay tax on any 3 years gain, so the tax would only be the gain in the property price from 3 years ago until now?????????? I dont assume this be true but have heard it somewhere!!?!?!?!A house isn't a home without a cat.
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BobProperty wrote:No there's no truth in that, someone is getting confused with the 3 year exemption for PPRs.
Many thanks, please expand if you would be so kind?0 -
If you have lived in the property as your Principal private residence, any time during the time of ownership, you get exemption for the time it was your PPR and the last three years of ownership.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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