CGT query regarding second rental property

Bangerchick

I've got myself in to a bit of confusion regarding CGT and what the liability is likely to be. I understand that the tax is liable on any gain made on the value of the property, but I am getting confused about the thresholds and also whether the fact that I have lived in both properties has an impact (I have read that it does but can't find a HMRC document that confirms this, also I understand that I can declare either property as the principal residence).

I'll put the facts in chronological order and hopefully someone can give me a few pointers.

1996 - Bought property A and lived in it
2001 - Bought property B and rented it out
2004 - Moved into property B and rented out property A (this remains the case now)

If I now sell property A, how do I calculate the CGT due? (apart from paying for tax accountant to help! )

I am also married, so is there any way to transfer the asset to my partner in order to minimise tax (one of us worksand the other doesn't at the moment)

Many thanks,

S

CLAPTON

It depends upon whether you sell before 5 april 2008 or sell after as the prebudget statement has changed the cgt rules.

Best to give the full details like
price of prop A when bought
month and year of purchase
month and year you moved out
price you expect to sell
selling costs
when you expect to sell
when did you get married

but unless the price is quite high and looking at the facts approximately you will probably pay nothing

silvercar

So proerty A was your PPR from 1996 to 2004. You are exempt from CGT for the time it was your PPR and the last 3 years of ownership. The calculation is done in months not years, but it looks like CGT would only be charged on a few months of 2004 that aren't in the last 3 years of ownership when you weren't living there. This would be a few months out of 11 years so your only looking at 4% of the total gain. Add to that a CGT allowance of £9,200 plus some taper relief and letting relief (assuming you sell before April 2008) and the gain would need to be pretty big for you to get a CGT bill.

Bangerchick

Thanks, I'll take a look at the guidance and see whats what.