CGT PRR on BTL

SXX

Hello - can someone work out CGT for me based on the following.  

Owned property total 288 months
Main home = 114 months
Rented out = 174 months
exempt = final 9 months


Bought for £57,500.  Sold £270,000 - minus allowable expenses £24,000
 
Basic rate tax payer.


(It's the PPR bit I am struggling with).

Thanks 

[Deleted User]

Gain on your figures (assuming all expenses allowable) is 178500. PPR is 123/288 = 76234 leaving 102266 chargeable before annual exemption. I also assume that ‘main home’ means main residence. The gain must be declared and tax paid within 60 days of sale.

SXX

Thanks for the prompt response.   

How did you work out gain of £178500?   

Should it be £188,500 ( £270k - £57,500 - £24k = £188500 and then if I factor in £12300 allowance.then the gain would be £176,200 - £76234 (PPR) = £99,966 which would be the chargeable gain. So I would pay tax on £99,966?

Yes I lived in the BTL as my main (and only home) for 114 months and then rented it out for 174 months.

Jeremy535897

Gain £188,500, PRR 123/288 = £80,505 leaving chargeable £107,995 less £12,300 = £95,695.

What are the expenses?

[Deleted User]

SXX said:

Thanks for the prompt response.   

How did you work out gain of £178500?   

Should it be £188,500 ( £270k - £57,500 - £24k = £188500 and then if I factor in £12300 allowance.then the gain would be £176,200 - £76234 (PPR) = £99,966 which would be the chargeable gain. So I would pay tax on £99,966?

Yes I lived in the BTL as my main (and only home) for 114 months and then rented it out for 174 months.

You are correct - I can’t type. However your order is incorrect. The fraction of 123/288 is applied to the £188500 - 80505. This reduces the gain to 107995. From this you deduct 12300 to leave 95695 chargeable.

SXX

Thanks both - the expenses are buying/selling costs, lease extension premium plus related costs, plus damp proof course was put in when I bought the property as it had damp

Jeremy535897

The cost of the extension to the lease should be allowable unless there is less than 50 years to run (as extended) when you sell (unlikely to be a problem I suspect).

I would claim the damp proof course as well, although if it were a replacement of a previously failed one, the matter is not free from doubt.

SXX

Jeremy535897 said:

The cost of the extension to the lease should be allowable unless there is less than 50 years to run (as extended) when you sell (unlikely to be a problem I suspect).

I would claim the damp proof course as well, although if it were a replacement of a previously failed one, the matter is not free from doubt.

The lease has around 154 years unexpired since extending.   No the flat did not have a damp proof course when I bought it.  Can I also claim for the decorating as a result of the damp proof course?   The walls needed to be repainted after the damp proof course  and kitchen and bathroom units had to be taken off for the damp proof course and  then refitted?  (I would not have to do any these works if I did not have to put in a damp proof course).

[Deleted User]

SXX said:

Jeremy535897 said:

The cost of the extension to the lease should be allowable unless there is less than 50 years to run (as extended) when you sell (unlikely to be a problem I suspect).

I would claim the damp proof course as well, although if it were a replacement of a previously failed one, the matter is not free from doubt.

The lease has around 154 years unexpired since extending.   No the flat did not have a damp proof course when I bought it.  Can I also claim for the decorating as a result of the damp proof course?   The walls needed to be repainted after the damp proof course  and kitchen and bathroom units had to be taken off for the damp proof course and  then refitted?  (I would not have to do any these works if I did not have to put in a damp proof course).

Did you claim any of these expenses against your rental income when completing your tax returns?

SXX

[Deleted User] said:

SXX said:

Jeremy535897 said:

The cost of the extension to the lease should be allowable unless there is less than 50 years to run (as extended) when you sell (unlikely to be a problem I suspect).

I would claim the damp proof course as well, although if it were a replacement of a previously failed one, the matter is not free from doubt.

The lease has around 154 years unexpired since extending.   No the flat did not have a damp proof course when I bought it.  Can I also claim for the decorating as a result of the damp proof course?   The walls needed to be repainted after the damp proof course  and kitchen and bathroom units had to be taken off for the damp proof course and  then refitted?  (I would not have to do any these works if I did not have to put in a damp proof course).

Did you claim any of these expenses against your rental income when completing your tax returns?

The damp proof course was put in when I bought the flat and at that time it was my main and only home for 9 or so years so it was not a BTL then and therefore did not complete a tax return.   

The lease was extended when the flat was a BTL but I did not claim the lease extension costs via tax returns as I was under the impression that lease extension costs could not be claimed via a tax return only as part of CGT reporting

Jeremy535897

[Deleted User] said:

SXX said:

Jeremy535897 said:

The cost of the extension to the lease should be allowable unless there is less than 50 years to run (as extended) when you sell (unlikely to be a problem I suspect).

I would claim the damp proof course as well, although if it were a replacement of a previously failed one, the matter is not free from doubt.

The lease has around 154 years unexpired since extending.   No the flat did not have a damp proof course when I bought it.  Can I also claim for the decorating as a result of the damp proof course?   The walls needed to be repainted after the damp proof course  and kitchen and bathroom units had to be taken off for the damp proof course and  then refitted?  (I would not have to do any these works if I did not have to put in a damp proof course).

Did you claim any of these expenses against your rental income when completing your tax returns?

OP did the damp proof work when acquiring the property, so I assumed not. If the damp proof course is an improvement, in my opinion the associated building and decorating work costs form part of it.