capital gains on property

nushy

firstly this is a great site and thanks to all the great advice given so readily by u guys, most of the time i can get answers by just using the search button but this i a bit more specific, i bought a property in 1998 for £72000 on a party buy part rent so my part was £36000 basis to live in, in 2000 i bought the outstnding 50% for £66000 taking my mortgage upto £102000, in 2002 i rented out the property for approx 9 months but then moved back in 2003 a year later i sold the property for £150000 and bought new property, i paid cgt on the rental income however i have just recieved a letter asking for details about my ownership of the property. i cannot remeber if i included this sale in my 2004/2005 tax return also the date for the inland revenue has expired so what want to know is if i will be liable for cgt and are the able to make enquiries after the deadline date. sorry for the long winded explanation but as u can see it is a bit complcated

ginger_nuts

you bought it in 1998 and it was you principal residence until £2002. you rented it out for 9 months and then lived in it for another year .
as this has been your Principal residence you are allowed £40,000 letting relief .When you moved back into the property in 2003 you became entitled to an exemption from CGT for the previous 3 years . You dont have any more CGT to pay ,they may be just checking up on you .

Bean_Counter

nushy wrote: »

i paid cgt on the rental income

I don't think you have to pay any capital gains tax at all, as it is 100% covered by private residence relief. As the period of letting is within the last 36 months of ownership, it is covered.

You stated that you paid cgt on the rental income. You should have paid no cgt at all. You should have paid income tax on the rental income, net of any allowable expenses. It is worth checking exactly just what tax you have paid in respect of the rental income.

nushy

thanks for help but i have finally found my paperwork and the net proceeds of sale after agent and solicitors fees was £60178.86 am i still liable or does the fact i let the property within the last 36 months of ownership protect me from cgt

Bean_Counter

nushy wrote: »

thanks for help but i have finally found my paperwork and the net proceeds of sale after agent and solicitors fees was £60178.86 am i still liable or does the fact i let the property within the last 36 months of ownership protect me from cgt

I presume that the net proceeds of sale reflect paying off mortgage etc. How the property was financed does not affect CGT liability, so you should still be OK.