Capital gains tax on selling property

jus18

Hi all, can anyone give me some advice please ?

I let out a flat which I am looking to sell, I live with my BF in his house and we are looking to buy a house together, so would I be liable for capital gains tax if I sell this flat ? Ideally I would like to avoid paying CG if possible as I need the money for the deposit. So if this is the case how can I ensure I won't have to pay this ?

Thanks for all advice given

scottishblondie

More details are needed. For starters:

• How long have you owned the property
• How long has the property been rented
• How much did you buy the property for
• How much is the property worth now

jus18

Hi there, i've had the flat for about 10 years, it's been rented for 5 years, I bought it for £80k and it's worth £105k now, thanks.

Pixie5740

The forum has numerous examples of CGT calculations available. Try this one of for size and then post your working.

If you owe CGT you owe it, there isn't a way around it.

jus18

Thanks for that Pixie - trying to work out if I will owe it first

bob_bank_spanker

To give meaningful advice you would need to post the figures with dates (months are acceptable to HMRC, not years), however at first glance it is very unlikely you would have to pay any CGT.

Pixie5740

jus18 wrote: »

Thanks for that Pixie - trying to work out if I will owe it first

You will only know that by doing the calculation.

jus18

bob_bank_spanker wrote: »

To give meaningful advice you would need to post the figures with dates (months are acceptable to HMRC, not years), however at first glance it is very unlikely you would have to pay any CGT.

Thanks Bob - just want to double check I am doing the right thing here as would otherwise probably hold onto the property if likely to have to pay this

bob_bank_spanker

jus18 wrote: »

Thanks Bob - just want to double check I am doing the right thing here as would otherwise probably hold onto the property if likely to have to pay this

Really? Don't let the tax tail wag the dog. If you had to pay CGT it would be very, very low. Remember, is only charged on the gain, not the sale price.


Would you decline extra hours at work because you have to pay tax on them?

Pixie5740

jus18 wrote: »

Thanks Bob - just want to double check I am doing the right thing here as would otherwise probably hold onto the property if likely to have to pay this

Rather than face a potential CGT bill you'd face a definite additional 3% SDLT bill?

macca1974

Assuming that you are a basic rate tax payer. You first need to calculate the gain.

So based on your figures £105K - £80K = £25K. You can also discount a chunk of the gain for when you lived in the property plus an additional period of time. This is all done by the month so use the calculator. But....Even if you only were able to knock off 50% of the gain, this would reduce it down to £12.5K. You would also be able to take off your selling costs which will probably be £1K-£2K. So I suspect that you will have a gain that is below the annual CGT exemption that is £11,300 this year. So no tax to pay. But you would need to work out the numbers properly yourself.

Also (and I've not needed to look into this in detail), you may well pay far more in stamp duty on your new house if you don't sell the flat (3% extra I think).