Advice on buy to let

Blockz99

booksurr wrote: »

you are of course supposed to SELF assess your own tax and are therefore expected to know more about tax than the HMRC call centre staff do !

yes the liable period is pro-rated between periods when you had no or only 1 lodger and those with 2 (or more)

as a simple example:
gross gain : selling price 350 - original purchase price 13 years ago say 200k = 150,000 gross gain ("profit")

had 2 lodgers for 6 months in year 5, and all of years 9&10. Total liable period = 2.5 years. Except as above had 1 lodger all the time from year 5 to date of sale meaning the exempt period = 13 years - 2.5 years = 10.5

private residence relief ("exempt gain"): 150 x 10.5/13 = £121,153

letting relief is lower of:
a) PRR £121,153
b) gain in let period: 150 x 2.5/13 = 28,847
c) max allowed 40,000

personal allowance 11,000

net taxable gain 150,000 - 121,153 - 28,847 - 11,000 = ZERO
no CGT to pay

real calculation should be done in months (or days) but not in whole years!

After a sleepless night I read this and feel much better. Thank you for you constructive and very clear advice.

Kind Regards
M