Capital Gain Tax Check help please

Mr.Grumpy76

Hi there folks,

Wife has just sold, a property which was in her sole name & which we usd to live in but was rented out for a number of years after we bought a house together. As it'll be a long time before her 2015-2016 tax return is prepared, just wanted to check what the CGT is likely to be so we can set it aside. I have done a bit of research & came up with a rough calc & looking for a kind person who knows about this to check it looks ok...

I have used ball park figures to keep it simple, will have to be more exact at the time I know....

Property was owned for 10 yrs & we lived in it for 1st 18 months.
Lets say it was rented out for last 8.5 yrs
Bought for £45k, sold for £70 k, roughly £3k in legal & other fees to buy & sell.

So basic gain = £70k- (£45k + £3k) = £22k

As we lived in it for 18 months but can also claim for the last 18 months before sale, private resident relief = equivalent of 3 yrs = 3/10 = 30% of basic gain £22k = £6.6k

This reduces gain to £15.4k.

Letting relief will be 8.5 yrs less 1.5 yrs = 7/10 x Basic gain £22k = £15.4k

However the actual Letting relief applied will be the lower of : £40k, the calculated letting relief (£15.4k), or the Private resident relief already calculated (£6.6k)- which clearly in this case is the £6.6 k private resident relief

So £15.4k- £6.6k leaves £8.8k.

As this is less than the £11k annual allowance, then no CGT is due?

I am not sure if we can claim any capital improvements during the time although we replaced 2 windows & a boiler (twice) but not sure about the paperwork, however even without this it looks like we are clear ?

Does this sound right or am I missing something.

Cheers.....

saintalan

Hi there, yes it all looks about right dont think you will owe anything. You have until Jan 31, 2017 to pay.

Cheers

Alan