capital gains tax poser

bigjluk

i have 2 properties,1 i own with my girlfriend,and 1 which is solely in my name and which i have owned for 9 years,and is in my name only aswell as my main residence for the last 3 and a half years.i want to sell the property ,it is worth about 140k,and if i sell 112k is outstanding.what if any cgt would i have to pay ?

TrickyDicky101

O/s mortgage is irrelevant to determining your liability to CGT. What did the property originally cost you and what improvements have you made to the property in the time you have owned it?

bigjluk

i bought it for 102k and there has been a few improvements but nothing major,also i should say it was a gift off my parents in 2002 ,it was paid off,and i remortgaged it for 102k

TrickyDicky101

Assuming £102k was the market value of the property when it was gifted to you, then your chargeable gain is £140k less £102k less any selling costs (EA fees and solicitor's costs). Let's say fees amount to £3k so net gain is £35k.

3.5 of last 9 years it qualifies for primary residence relief so resultant net gain is 35 x (9 - 3.5)/9 = £21.4k

Your personal exempt allowance for CGT in 2010-11 is £10,100 so take this off: £21.4k less £10.1 = £11.3k chargeable gain.

CGT will be payable at 18% if you are a lower rate taxpayer or 28% on any of the gain that falls into higher rate bracket, so min of £2k payable to max of £3.2k