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Capital gains tax

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KMMT
KMMT Posts: 34 Forumite
Capital gains tax
Hi, hoping someone can give me some advice.

In 2007 me & an ex partner brought a property. It was our only, & main home. Was meant to be our forever home but In 2010 we split up and I moved out. My partner stayed & I paid my half of the mortgage until January 2012.

In January 2012 we rented the property out. I paid tax on my half of profit we made (it was only about £35 so paid it through my employer - my tax code changed slightly. The reason we rented it out Is because we would of been in negative equity when we tried sell in 2011. (Rented with full permission of the mortgage company).

The beginning of January I moved back into this property. As house prices have now risen we decided to try sell it again so I can finally cut financial ties with my ex. (It is quite amicable however I am remarried).

We are now back in positive equity & I am walking away with the deposit I put into the house initially plus a little more. This is going to go on my next home that I am buying with my husband.

The question I have is am I liable for any Capiital Gains Tax?

Thanks.

Comments

  • pjclar02
    pjclar02 Posts: 437 Forumite
    How much was it bought for and what was/will it be sold for?
  • KMMT
    KMMT Posts: 34 Forumite
    Brought for 235k sold for 242k.
  • purdyoaten
    purdyoaten Posts: 1,159 Forumite
    KMMT wrote: »
    Brought for 235k sold for 242k.

    A joint gain of £7000?

    You each have an annual tax free exemption of £11000 before even taking into account the reliefs that you may well be due. In view of that, you have nothing to worry about!
    There are 10 types of people in the world - those who understand binary and those who do not. :doh:
  • KMMT
    KMMT Posts: 34 Forumite
    Yep, a joint gain of £7k. Is that tax free exemption just in relation to the house? Is it completely separate to the allowance i receive through work before I pay tax. I work part time & earn approximately £22k per annum so I pay tax & NI on that via my employee. X
  • purdyoaten
    purdyoaten Posts: 1,159 Forumite
    edited 27 April 2014 at 9:37PM
    KMMT wrote: »
    Yep, a joint gain of £7k. Is that tax free exemption just in relation to the house? Is it completely separate to the allowance i receive through work before I pay tax. I work part time & earn approximately £22k per annum so I pay tax & NI on that via my employee. X

    After calculating exempt reliefs (which are not now necessary) you each, personally, have an annual exemption of £11000 to set against whatever gains that you make in this tax year. This allowance against Capital Gains only is in addition to your personal income tax free allowance of £10000. You would need to have made a joint of £22000 after reliefs to worry about capital Gains tax.

    For example, if you each earn £100k at your employment, you each still have an annual Capital Gains exemption of £11000 to utilise.
    There are 10 types of people in the world - those who understand binary and those who do not. :doh:
  • KMMT
    KMMT Posts: 34 Forumite
    Thank you for explaining that. It makes sense now.
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