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Capital gains Tax
Rancid
Posts: 7 Forumite
Can someone please explain how Capital Gains Tax works. My mate has a flat, which is a second, property, he's looking to sell but reckons this will cost him a large wedge even though it's not worth a great deal and he could really do with selling it.
Any advice?
Rancid
Any advice?
Rancid
0
Comments
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Uf the property has been a main residence within the last three yearsm then someone can sell without CGT,
Otherwise, you pay CGT on the profit made, less about a £8,500 allowance per person per year.
So depending on what it's worth, he mightn't have that much to pay
Everything that is supposed to be in heaven is already here on earth.
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Thanks for this. I'm guessing his flat is worth £50k tops but hasn't been a main residence for some 5yrs since he moved in with his partner, now his wife. Would he get £8,500 allowance times 5years exemption if he sold for that amount? Therefore £42,500 exempt - please excuse my ignorance but they now have 2 kids and could really do with cash so trying to help debabble this for my now very busy ole mate.0
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(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
Rancid wrote:I'm guessing his flat is worth £50k tops but hasn't been a main residence for some 5yrs since he moved in with his partner, now his wife.
See this thread0 -
Many thanks, am still a bit muddy on what this would mean financialy on any sale. Seems a bit rough if he has to pay out anything as it was his parents home he inherited after his dad passed away.0
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he only pays tax on the increase in value, not the total value and there are reliefs and allowances to reduce this.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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He will pay CGT on the difference between the value when he inherited it and the price he sells it for. (Minus his £8500 allowance and certain other allowances).
If his wife is also on the deeds she gets an £8500 allowance as well.
It may be a good idea for him to see an accountant. We saw one who would give the first consultation free, and he worked out in that time how much CGT we would be liable for. (This was also for an inherited property).(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0
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