Capital Gains Tax Query

saintalan

booksurr wrote: »

WRONG. OP and his sister are "connected persons" (relatives) therefore the transaction between them is deemed to take place at market value not at whatever discounted (or inflated) sum of money actually passes between them....

Thanks booksur my mistake.

Alan

neopaz

saintalan wrote: »

Hi Neopaz welcome to the forum.

The simplest answer is, worth does not come in to it. CGT is due when a gain is realised (ie sold) based on the difference between buying and selling price.

There are allowances available to renters. If you live in the property as your main residence for at least a short period (say 6 months) then you can add 18 months to that for relief.

In this instance although you may have got a deal, you will potentially pay more CGT than if purchased at market value.

I assume there are no issues with your sister selling. Was it her primary residence and no CGT due? If not CGT may have been payable if deliberately sold below value.

Alan

Thank you for the reply Alan, very kind.

There were no issues when my sister sold the property to me and it was her Primary residence for 10 years. So if I were to sell the property for say 160k, how much capital gains tax would I have to pay on the 150k profit I could potentially make? (Bearing in mind I have never lived in the property).

saintalan

Hi Neopaz,

As booksurr said you will need to get the market value on purchase, the only relief you will get is the Letting relief which will be the lower of £40k and the net gain.

Any taxable gain would be charged at 18% and/or 28% depending on your tax rate.

Chances are you will pay nothing and pretty certain you wouldnt pay any if it was your primary residence for a few months prior to selling.

Hope that helps.

Alan

PJRG

Hi I am new today. Can anyone help me, please?


Regarding CGT. I have worked out my gains but the annual exempt amount is £11,000.


Do I deduct £11,000 from this amount for the tax form or will the tax office deduct that when I send it?


Thanks


PJRG

saintalan

If your gain is less than your allowance there is nothing to pay.