Couples, Capital Gains & their indiv. Tax Returns

LittleBiddy

Hi
I don't know what it is about the filling in of Self assessment forms but I lose all common sense & become a blubbering fool. I hope someone out there can advise - we brought & sold a house in Tax year 2013/14. A 50:50 ownership. Now we're filling in our Tax Returns & I'm not sure what we should each put in. For example: We brought the house for £74k, spent £10k doing it up, and sold it for £110k. How do we put this in the Tax Return? Husband says we just put down our own percentages ie: Bought for £37k, Renovations: £5k and Sold for £55k - is that the right thing to do? Profit: £18k (or £13k minus the costs), CG allowance is £10.9k so we'll each pay tax on £2.1k at 18%; Is it that simple?

antrobus

LittleBiddy wrote: »

....Profit: £18k (or £13k minus the costs), CG allowance is £10.9k so we'll each pay tax on £2.1k at 18%; Is it that simple?

Well, it's arguable whether or not the profit should be taxed as capital or income.

Some might say that you and your husband were trading as property developers, given that you appear to have purchased a house with the intention of doing it up and selling it as a profit, and have done just that.

I'd get advice from a proper accountant if I were you.

CLAPTON

LittleBiddy wrote: »

Hi
I don't know what it is about the filling in of Self assessment forms but I lose all common sense & become a blubbering fool. I hope someone out there can advise - we brought & sold a house in Tax year 2013/14. A 50:50 ownership. Now we're filling in our Tax Returns & I'm not sure what we should each put in. For example: We brought the house for £74k, spent £10k doing it up, and sold it for £110k. How do we put this in the Tax Return? Husband says we just put down our own percentages ie: Bought for £37k, Renovations: £5k and Sold for £55k - is that the right thing to do? Profit: £18k (or £13k minus the costs), CG allowance is £10.9k so we'll each pay tax on £2.1k at 18%; Is it that simple?

everything is divided by 2 and each person is allowed cgt allowance of 10.9K for last year


so buying is 37k each less half the buying cost
selling is 55 k each less half the selling cost
10k capital spend (if allowable items ) is 5k each


if total of buy /sell costs was 7K i.e. 3.5k then it would look like


55k - 37 k -5k -3.5k = 9.5k
less cgt allowance of 10.9k (each ) = NO TAX






there might be some discussion about whether cgt or income tax is payable but that's a different issue