Cgt

ginger_nuts

i have a BTL property .I bought it in May 2005 for £40,000 .I was considering living in the property for a while ,but a property has come on the market that I would be interested in ,so I may sell the BTL now .
How much CGT would I have to pay .I bought at £40,000 current value £95,000 .

I am guessing aroung £20,000 tax but this is just a guess
I am a basic rate tax payer ,if that makes any difference

Elaine_Wilson

Basically, you have made a gain of £55,000. Expenses of purchase and disposal (legal and agents fees, stamp duty, etc) would reduce this. If you have no other capital gains in this year you will also have your annual exemption. This is £9,200 for 2007/08.

So you are looking at paying tax on something like £46,000. You already pay basic rate tax so this will put you into higher rate.

You will pay 20% of that part of the gain which takes your total income up to the top of the basic rate band and 40% on the rest.

So a worse case calculation is 40% which is £18,400.

silvercar

Did you ever live in it as your home? If so, the CGT will be zero.

If not then Elaine's calculations are spot on.

Remember the allowed expenses: mortgage arrangement fee, broker fee, survey, legal costs (buying & selling), any mortgage redemption penalty. estate agents fees.

ginger_nuts

no I never lived in it .Actually I was going to move into it soon and sell it next year ,thus avoiding all CGT .But a house has come on the market that I am interested in , I havent viewed it yet but I just wanted to check my figures where about right before I do anything daft like buy a house I cant afford .