Partner's House and CGT

LuciCharm

Hi

Hope someone can advise on CGT.

My partner moved in with me 10 years ago. 4 1/2 years ago he sold his home
and used the proceeds to buy another and has rented it out for 4 years.
So both our houses are in our sole names - his & hers :-)

We were thinking of selling it now and the increase in value would be 60k.

A couple of questions :-

If he sold, how do we work out what CGT would be payable ? (he is self-employed btw)

If we don't sell, do you have any advice for minimising any Capital Gain
for a future sale ? ie keep it another 10 years, move in and rent mine out,
sell it and buy another ?

Thank You
Luci

silvercar

If he sold, how do we work out what CGT would be payable ?

the gain is the selling price less the buying price less improvements (but not maintenance).

you reduce this by 15% as you have owned it for 4 years. and you have an allowance of £9,200.

If we don't sell, do you have any advice for minimising any Capital Gain
for a future sale ?

Living in it creates a capital gains tax exemption for the time it was your home and the last three years of ownership.

LuciCharm

Thank You.

A further question if you see this.

I'm assuming the 15% you mention is tapered relief ? Can you tell me
how that works and will the longer he keeps it increase the relief he will get ?

silvercar

Taper relief increase by 5% each year from 2 years of ownership until it reaches 40% ie you only pay on 60% of the gain.

If you gain was 60,000, taper relief after 4 years of ownership would reduce the gain by 15% ie by 9,000 to 51,000.