CGt on 2nd home

mjatom

We have owned our home since 1970. Various moves over 50 years ending up in home valued approx £550000 (bought in 1988 for £128000) Moved to new bungalow in 2020 and rented out our old home in Nov 2020. Now wish to sell it. Is CGT payable.

AdrianC

You bought it in 1988 for £128k.
You moved out some time last year prior to November.
You are now selling it for £550k.

There's a nine month taper period, nine months of liability disregarded.
Assuming you moved out last September, and your sale completes this September, that leaves three months out of about 400 - so less than 1% of the £420k gain would be taxable, less than £4k. Your first £12k of taxable gains are not taxed.

Keswick1uk

And you say "we" so the gain is split over owners too. And you each get an annual allowance.

Just be careful you don't have other gains using the allowance. 

saajan_12

mjatom said:

We have owned our home since 1970. Various moves over 50 years ending up in home valued approx £550000 (bought in 1988 for £128000) Moved to new bungalow in 2020 and rented out our old home in Nov 2020. Now wish to sell it. Is CGT payable.

You'd need to make all this more accurate with the actual selling price and dates of purchase / move out / sale, but roughtly:
* Gain = 550k - 128k = 422k
* Owned for 612 months (1970->2021)
* Private Residence Relief for 609 months (the time you lived there 1970->2020 plus last 9 months)
* Taxable gain = (612 - 609) / 612 ie 0.5% of 422k = £2,069

You have a 12k allowance for realised capital gains (ie across any other investments you sell in the same year). If you don't have any remaining allowance, then you'd pay tax on £2,069 at 18% or 28% depending on whether you're basic rate or higher rate. Also if 'we' means two people, then calculate based on each person's share, so likely just £1k of gain each. 

AdrianC

saajan_12 said:

mjatom said:

We have owned our home since 1970. Various moves over 50 years ending up in home valued approx £550000 (bought in 1988 for £128000)

You'd need to make all this more accurate with the actual selling price and dates of purchase / move out / sale, but roughtly:
* Gain = 550k - 128k = 422k
* Owned for 612 months (1970->2021)

I THINK they mean they were an FTB in 1970, and moved over the years with this property being bought in 1988 for £128k.

A £128k property in 1970 would be an absolute palace, a heck of a lot more than £550k-worth today.

saajan_12

AdrianC said:

saajan_12 said:

mjatom said:

We have owned our home since 1970. Various moves over 50 years ending up in home valued approx £550000 (bought in 1988 for £128000)

You'd need to make all this more accurate with the actual selling price and dates of purchase / move out / sale, but roughtly:
* Gain = 550k - 128k = 422k
* Owned for 612 months (1970->2021)

I THINK they mean they were an FTB in 1970, and moved over the years with this property being bought in 1988 for £128k.

A £128k property in 1970 would be an absolute palace, a heck of a lot more than £550k-worth today.

Whoops, right you are, missed the 1988 there. 
* Gain = 550k - 128k = 422k
* Owned for 396 months (1988->2021)
* Private Residence Relief for 393 months (the time you lived there 1988->2020 plus last 9 months)
* Taxable gain = (396 - 393) / 396 ie 0.76% of 422k = £3,197