Capital Gains Tax

*~Zephyr~*

Are there any Capital Gains Tax experts on here? Just wanted someone to check my workings out in the following scenario:


Property purchased as primary residence in 2001 for £49k
Moved out December 2011, rented out September 2012
In 2011, house valued at approx. £105k
Currently house worth approx. £120k going by sold price of similar in the immediate area.


So, if the property was sold next year:
Owned for 15 years
Lived in for 10.5 years
Plus 18 mths final ownership period tax relief
= 12 years Private Residence Relief - 12/15*71k = 56.8k


Further relief applied of 3.5 years of renting - 3.5/15*71k = 16.5k


Tax relief of 56.8+16.5k against 71k gain means no CGT to pay.


Am I right or have I missed something glaringly obvious?

HappyMJ

Annual exemption amount of £11,100...still no tax to pay.

*~Zephyr~*

HappyMJ wrote: »

Annual exemption amount of £11,100...still no tax to pay.

Doh! Yup, forgot about that *facepalm*

CLAPTON

*~Zephyr~* wrote: »

Are there any Capital Gains Tax experts on here? Just wanted someone to check my workings out in the following scenario:


Property purchased as primary residence in 2001 for £49k
Moved out December 2011, rented out September 2012
In 2011, house valued at approx. £105k
Currently house worth approx. £120k going by sold price of similar in the immediate area.


So, if the property was sold next year:
Owned for 15 years
Lived in for 10.5 years
Plus 18 mths final ownership period tax relief
= 12 years Private Residence Relief - 12/15*71k = 56.8k


Further relief applied of 3.5 years of renting - 3.5/15*71k = 16.5k


Tax relief of 56.8+16.5k against 71k gain means no CGT to pay.


Am I right or have I missed something glaringly obvious?

you seem to be double counting your final 18 months and some of the letting relief

but with the cgt allowance of 11,100 and of course you can reduce the gain by your buying/selling expenses (solicitor, estate agent etc)
then no tax to pay

*~Zephyr~*

CLAPTON wrote: »

you seem to be double counting your final 18 months and some of the letting relief

Did I? I can't see it

CLAPTON

the 18 month is the last 18 month of ownership : this overlaps your letting period and both can't be counted

also if you were doing this for real, you need to work in months when the overlap would be more clear