Cgt on property rental

mangrego

Hi

Can anyone shed any light as to what the rule is on CGT on rental property please
I have owned a property for 24 years with no morgage and i am thinking of renting the house out for maybe 10 years what CGT will i have to pay if i then decide to sell it in 10 years time.

Thanks for any reply's

regards

:j

GhIFA

Impossible to say - we have no idea what value the property will be valued at in 10 years time, what the applicable CGT rate will be, or what the CGT allowance will be.

pjclar02

Under current tax laws, if you have never lived in the property and it has been rented out throughout your period of ownership, then you would pay capital gains tax on the entire uplift from the original cost to the disposal proceeds (less annual exemption of £10,600). You would then pay capital gains tax on this gain - at 28% if you are a higher rate taxpayer (some of the gain will be at 18% if you are not yet into higher rate tax).

If you have lived in the property at some point the rules will be different - but as above who knows in 10 years time...

mangrego

Hi

Just to clarify i have lived in the property for 24 years, say i paid £40,000 for the property and say its value is £ 150,000 this is just a scenario as of today;s rates i know in ten yrs time it will be different but i am just asking if it was now and i had rented it our for 10 yrs

regards

00ec25

mangrego wrote: »

Hi

Just to clarify i have lived in the property for 24 years, say i paid £40,000 for the property and say its value is £ 150,000 this is just a scenario as of today;s rates i know in ten yrs time it will be different but i am just asking if it was now and i had rented it our for 10 yrs

using the current rules abd rates for 12/13 yax year. Note calulcation must be done in months not years

A) Gain 150-40= 110

LESS
private residence relief = period lived in as main home + last 3 years of ownership becuase it was once your main home = (14+3)/24x110= £77,917

C) letting relief - lower of
1) PRR
2) gain during let period (24-17)/24x110 = 32,083
3)cap of £40k

D) less annual allowannce £10,600

Net gain liable to tax: A - B- C (lower of 1,2, or 3) - D = zero
no tax payable

mangrego

00ec25 wrote: »

using the current rules abd rates for 12/13 yax year. Note calulcation must be done in months not years

A) Gain 150-40= 110

LESS
private residence relief = period lived in as main home + last 3 years of ownership becuase it was once your main home = (14+3)/24x110= £77,917

C) letting relief - lower of
1) PRR
2) gain during let period (24-17)/24x110 = 32,083
3)cap of £40k

D) less annual allowannce £10,600

Net gain liable to tax: A - B- C (lower of 1,2, or 3) - D = zero
no tax payable

Hi

Thanks for your response well how confusing is that!! thank you now i can decide what to do just wanted to know the downfalls if there were any.

regards