CGT and Taper Relief

Poppy04_2

I'm considering selling a property I currently rent and I'm concerned about the CGT but I don't know enough about CGT and taper relief.

Here's my story:

Bought the house in 1992 for £55,500. In 2002 bought another house and moved into that but couldn't sell the old property and rented it out.

At the point we moved to the new place the old place ceased to be our primary residence and the old property has been rented out since then.

The value of the old place is now around £200k and we are thinking of selling next spring.

So, questions!

1. What is the capital gains liability? (How much of the £145,500 would be liable?)
2. What relief(s) should we seek to establish to reduce that liability?
3. Is there an optimum time to sell (i.e. this year or next year?)
4. I have a Ltd. company - is there any advantage to be had from transferring the house to the business? or putting the proceeds from the sale into my Ltd. company for re-investment?

I'm really after opinions before I go to my tax advisor. Thanks for any advice you can offer!

fengirl_2

It looks as if there will be no CGT to pay.
The staright gain is 200000 - 55000 = 144,500. The 10 years during which you lived in the property is exempt, as are the final 24 months, so roughly speaking 12/17ths of the gain is exempt, leaving 42500 chargeable. There is then a general exemption of £45k on gains arising on properties which have been your only or main residence and then let.
Transferring the property to your Ltd Co will not exempt you from CGT as you will be deemed to have disposed of it at market value anyway. And how the proceeds of sale are invested are not relevent.

Poppy04_2

Thanks for the advice Fengirl, very, very much appreciated. I will chat to my accountant further.

silvercar

I agree with Fengirl's advice, but some of her figures are slightly out. You are exempt for the time it was your PPR and the last three years of ownership. Lettings relief is capped at £40k. Still means you should have no CGT to pay.:)

Poppy04_2

Thanks Silvercar. I really appreciate the advice - slept better last night!