Capital Gains Tax, if and when payable?

taxduffer

We bought our house in Feb1997 for £75000 and moved to another house in Sept 2012.
As we were unable to sell in 2012 we became unintentional landlords and decided to let the property.
If we were to sell, shall we say in Sept 2014, for £200000, would we become liable for any CGT now that the government has reduced the time limit for selling from 36months to 18 months?
I am assuming that we would both be eligible for £10900 CGT relief and also the £40000 Private Letting Relief as the property is held in joint names.

00ec25

no you would not pay any CGT
calculation should be in months not years but I'm going to be lazy and do in years, you can easily re work it yourself using months

your gain is 125K and by Sept 14 you have owned for approx. 17.5 years

15/17.5 is exempt due to actual occupation plus the 18 months addition for selling after the new rules. That exempts about 16.5/17.5 of the gain ie 117k, you then have up to £80k of letting relief and £21.8k of personal allowance.

will be a very long time before selling it causes you to actually pay CGT

holly_hobby

Period of ownership if sold Sept 2014 = 211 mths
or which
You have PRR exemption of 187 mths & last 18mths of ownership = 205mths exempt under PRR

gain 200 - 75 = 125k

125/211x205=£121,445.50 of gain exempt from cgt

This leaves just £3,554.50 total taxable gain between the 2 of you. Which will be totally cancelled out just by lettings relief (and thats not taking account of any other costings that can be deducted), meaning you can save your annual cgt allowances for other chargeable asset disposal, which will be £11k per person for 2014/15.

Hope this helps

Holly