Capital Gains Tax calculation - worried

pixiepoo

Hi,

I am trying to work out how much capital gains tax (if any) i would have to pay if i decided to sell the apartment that I own. It is currently being advertised but i am worried that i will have to stump up for a large bill at the end.

I bought my apartment in July 2001 for £47,000.
I lived there until April 2008 where i moved out to stay with my daughter and I have rented it ever since.
I have been collecting rent of £495 per month using an agency (all declared)
My tenant moved out November 2012 and i have decided that i would like to sell the property.

The apartment has been valued at £85,000.

How do i work out the potential tax that i would owe on the property? The value of the property is low and i am worried that it will be eaten up as tax. It is the only property I own (I live in a house that i rent off family)

Any advice would be gratefully received

Thank you

xylophone

http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm

CLAPTON

basically you pay no tax

the gain is 38,000 less buying and selling costs

you have owned it for 12 years approx

you are exempt for the time you lived there i.e. 7 years plus the last three so that's 10 years

you can claim letting relief for the period let out i.e. so no tax
plus you haven't even used your 10,600 cgt allowance

have a nice weekend

pixiepoo

Thank you for replying with this helpful information.

Will I have to prove in some way i lived there for those 7 years - do they ask for documentation?

Many thanks

Cook_County

pixiepoo wrote: »

Thank you for replying with this helpful information.

Will I have to prove in some way i lived there for those 7 years - do they ask for documentation?

Many thanks

Yes if your self-assesment return is audited.

jimmo

Cook_County wrote: »

Yes if your self-assesment return is audited.

Strictly speaking, that is correct and you should have some form of evidence that you lived there. However in my years of doing Capital Gains Enquiries for HMRC I never asked anybody to provide such evidence.

That was because, in my judgement, there was already enough evidence in the HMRC files and records of where the person lived.

Hopefully you still have some documentary evidence of when you purchased the property and maybe you still have your mortgager’s consent to let or records of the conversion to a BTL mortgage.

If I were asking that would be sufficient (along with HMRC’s own records of your Tax Returns where you have declared your letting income).

Having said that, if HMRC ask you for evidence, I am afraid that there is no such thing as a list of acceptable documents.

HMRC will just ask what evidence you have.