Selling 2nd Property - Tax implications help plz.....

sanju

I have a 2nd property which was purchased back in 1990 for £80K and now is worth £240K. It has been on rent since but was purchased under a normal mortgage and not a buy to let. Me and my wife are both retied for last 15 years. Im 57 and she is 54.

Im thinking of selling it and was wondering the TAX implications i.e. capital gains tax & Inheritance Tax. Is there anything else I need to think?

Many thanks for your time.

Sanj

hopon

Rough computation assuming it is only in your name, never been lived in as your own residence, never had any money spent on improvements, bought 1/1/90 sold 1/7/2007:

Sold 240000
Cost 80000
Indexation allowance 28880
Taper Relief 52448

Tapered gain 78672
Less annual exemption 9200
Taxable 69472

This would then be taxed at 10% 20% or 40% dependent upon your other sources of income for the year. If you had no other income then just under £21k

slop

Can you please explain wht Indexation allowance is and how do you qualify?

Also What is taper relief and who can get it?

Thanks

hopon

slop wrote: »

Can you please explain wht Indexation allowance is and how do you qualify?

Also What is taper relief and who can get it?

Thanks

Plenty of guides if you google for them, here's a few:

Indexation Allowance
Indexation and CGT in general
Taper Relief
Taper Relief

slop

great info

Jenksy10

Hi,

I am after a bit of advise like Sanju.

I bought a flat back in 1992 which i lived in for 3 years or so. Since then I have moved and rented it out - firstly whilst i rented an alternative property and for the last 6 years when i lived in and owned a 2nd property.

i am considering selling the flat now and it is worth around £170,000. I purchased it for £52,500.

Also the flat is in my name but should i put it in the joint names with my wife?

I have had a BTL mortgage on the property since i have not been in it.

Can you tell me what the CGT implications are??

Thanks

monkeymax

hopon wrote: »

Rough computation assuming it is only in your name, never been lived in as your own residence, never had any money spent on improvements, bought 1/1/90 sold 1/7/2007:

Sold 240000
Cost 80000
Indexation allowance 28880
Taper Relief 52448

Tapered gain 78672
Less annual exemption 9200
Taxable 69472

This would then be taxed at 10% 20% or 40% dependent upon your other sources of income for the year. If you had no other income then just under £21k

isn't taper relief set at 25% of the gain for buisness asset owned over 2 years?
or have you used 60% classing it as a non business asset?

silvercar

Big question, have you ever lived in it as your main residence? This would reduce taxable profit considerably.

Inheritance tax would depend on the value of your estate. CGT would occur only if you sold it. It sounds obvious but if you sold it and the money was left in your estate you would have the paid CGT and then have an inheritance tax liability.

Wishing you to live to be 120 or course!

Bean_Counter

monkeymax wrote: »

isn't taper relief set at 25% of the gain for buisness asset owned over 2 years?
or have you used 60% classing it as a non business asset?

Investment in residential property is always a non-business asset for taper relief.