Sold a house - how to put on a tax return?

Horlock

Just to clarify I'm not a big property tycoon, but when we moved house we couldn't sell so we just bought somewhere else and waited until we could sell. Sadly the we sold at just the wrong time as the market has gone up incredibly in the past year, and we sold just before that.

I'm quite sure that we have no tax to pay, but I believe that I need to declare it.

In total we had the house for 8 years, 4 of which we lived in it and then 4 in which it was rented out.

We paid 133000 and sold for 172000, I remember asking about whether there would be capital gains tax to pay back in 2008 but was assured that there wouldn't be unless it passed the £300000 ish mark.

My problem is I don't know how to declare it. I believe that it must be declared (even if there is no tax to pay), and I believe that it must be done a paper form - ie I can't do it online as I've been in the habit of doing before.

Any ideas where I need to put the figures and what figures I need to put - obviously the responsiblity is on me to get it right but I don't want to have to pay someone else for me when (I believe) there is nothing for me to pay to Inland Revenue.

Thanks for any pointers.

Regards

ed1990

Horlock,

Back of a fag packet calculation:

Assuming you owned the house by yourself for a moment, the gain on the property before any reliefs is £39k.

I assume for the fours years that you lived in the property it was your Principal Private Residence and that the last 3 years of ownership is a deemed period of occupation, as allowed by the relevant legislation.

The unrelieved gain is therefore 1/8 of the £39k, i.e. £4,875 which is within the annual CGT exemption for the year.

Do you have any other gains for the year?

Horlock

ed1990 wrote: »

Horlock,

Back of a fag packet calculation:

Assuming you owned the house by yourself for a moment, the gain on the property before any reliefs is £39k.

I assume for the fours years that you lived in the property it was your Principal Private Residence and that the last 3 years of ownership is a deemed period of occupation, as allowed by the relevant legislation.

The unrelieved gain is therefore 1/8 of the £39k, i.e. £4,875 which is within the annual CGT exemption for the year.

Do you have any other gains for the year?

Thanks for rapid response - I didn't expect anything so quickly. I've earned money in the past year (ie from employment) but no other gains. I should have said that for the 4 years it was rented out (don't know if that changes anything). But no rental income in the past year.

Assuming not - how do I actually fill in the relevant pages is it a case of putting in the total amount, or do in need to be quoting the 1/8 figure?

Also how do dates work for years in this regards.
Ie if I'm going to 5th april I think (because I haven't actually worked out dates) the periods will be approximately

owned and lived in as own home
4 months first financial year
12 months second financial year
12 months third financial year
12 months forth financial year
5 months fifith financial year
then revert of rented out
6 months rented (1 month empty)
12 months rented
12 months rented
11 months rented (1 month empty)
then empty for one week of the final financial year.

Ie looking at the start can I claim 3 years lived in (actually lived in for 3 complete years) 4 years lived in as period is closer to 4 years than 3 years or 5 years as I lived there for part of the five year period?

Thanks again for all the help

00ec25

ed1990 wrote: »

Horlock,

Back of a fag packet calculation:

ignore this, it is wrong in some key aspects
1. the calculation must be done in months not years, but as all you give is years I will use that for illustration purposes only
2. your gross gain is indeed 39k (172 - 133)
3. from that you can deduct legal fees, SDLT and EA fees associated with its purchase and sale
4. your total ownership period was 8 years, of which 4 was lived in AND, as result of that you get the final 18 months (rules changed wef April 2014) as an additional tax free period, so your Private Residence Relief is 39 x ((4+1.5)/8) = 26,813
5. because you are entitled to PRR, you can also claim Letting Relief which is the lowest of a) PRR (26,813), or b) gain in let period ie: 39 x ((8 -4-1.5)/8) = 12,187 or c) the max allowed of £40,000
6. you also get your personal allowance of £11,000 in tax year 14/15
7. therefore your net taxable gain is 39,000 - 26,813 - 12,187 - 11,000 = ZERO
8. Unless you are ALREADY required by HMRC to submit a tax return, then the fact that you have ZERO tax liability means you DO NOT have to declare your gain to HMRC at all
http://www.hmrc.gov.uk/cgt/intro/report-gain.htm
9. if you do in fact already submit an annual tax return then you must include the CGT calculation on your return as you have crossed the mandatory declaration threshold even if no tax is due because sales proceeds are x4 the personal allowance (ie £44k) threshold
10. IF you are already required to do a tax return then you can of course submit online. It is rubbish that you can only do via a paper return

00ec25

Horlock wrote: »

Thanks for rapid response - I didn't expect anything so quickly. I've earned money in the past year (ie from employment) but no other gains. I should have said that for the 4 years it was rented out (don't know if that changes anything). But no rental income in the past year.

Assuming not - how do I actually fill in the relevant pages is it a case of putting in the total amount, or do in need to be quoting the 1/8 figure?

Also how do dates work for years in this regards.
Ie if I'm going to 5th april I think (because I haven't actually worked out dates) the periods will be approximately

owned and lived in as own home
4 months first financial year
12 months second financial year
12 months third financial year
12 months forth financial year
5 months fifith financial year
then revert of rented out
6 months rented (1 month empty)
12 months rented
12 months rented
11 months rented (1 month empty)
then empty for one week of the final financial year.

Ie looking at the start can I claim 3 years lived in (actually lived in for 3 complete years) 4 years lived in as period is closer to 4 years than 3 years or 5 years as I lived there for part of the five year period?

Thanks again for all the help

LOL my post overlapped with yours

adjust my calculation for actual months
so...
1. total ownership period 86 months
2. lived in as main home: 4+12+12+12+5= 45 months
3. deemed occupancy period of final 18 months (11 months let incl 1 month empty of the final year of ownership + 7/12 of the previous year)
4. letting relief period: 86 - 45 - 18 - 1 = 39 months

Horlock

00ec25 wrote: »

LOL my post overlapped with yours

adjust my calculation for actual months
so...
1. total ownership period 86 months
2. lived in as main home: 4+12+12+12+5= 45 months
3. deemed occupancy period of final 18 months (11 months let incl 1 month empty of the final year of ownership + 7/12 of the previous year)
4. letting relief period: 86 - 45 - 18 - 1 = 39 months

Still haven't completed this tax return as wife has been ill, but just been looking back at this, and really grateful for it, but having just read it I think that the "-18" should be "-36" as the final relief should be for 3 years not 18 months as the house was disposed of in the tax year 2013-2014. Please correct me if I'm wrong.

purdyoaten

Horlock wrote: »

Still haven't completed this tax return as wife has been ill, but just been looking back at this, and really grateful for it, but having just read it I think that the "-18" should be "-36" as the final relief should be for 3 years not 18 months as the house was disposed of in the tax year 2013-2014. Please correct me if I'm wrong.

You are correct although 00ec25 did highlight 'rules changed wef from April 2014'.

Horlock

What do I do about the "Personal Allowance"?

Ie I can see where I put the combined figures of letting relief and private residence relief but can't see anywhere for personal allowance.

Logic says that personal allowance isn't something that I claim (just the same as personal allowance on earned income isn't something that I claim on my tax return - that is something that they deduct themselves). I just want to check that I've got it right and haven't missed something stupid.

Thanks again

booksurr

Horlock wrote: »

What do I do about the "Personal Allowance"?

Ie I can see where I put the combined figures of letting relief and private residence relief but can't see anywhere for personal allowance.

Logic says that personal allowance isn't something that I claim (just the same as personal allowance on earned income isn't something that I claim on my tax return - that is something that they deduct themselves). I just want to check that I've got it right and haven't missed something stupid.

Thanks again

correct. You don't include the personal allowance in your return

note you can file online, it does not have to be a paper return. just tick the box to say you have a CGT calculation and the online return will bring up the relevant CGT pages

as it is 13/14's tax return you can claim 36 months not 18

box 33 is the net gain after PRR and letting relief but excluding the annual allowance (total in box J on the workings sheet on page cgn 21)

box 35 - put X since you are claiming letting relief (and PRR)

box 37 state you claim (partial) PRR and lettings relief - attach the computation sheet CGN21 to show your workings, with the actual relief calculations shown in the text box to support the figure input to box I