Help required re CGT & PRR

SXX

Hello - can someone please work out the CGT on the following please?

Bought flat for £57,500.
Sold for £280,000
Owned the flat for a total of 292 months
Lived in the flat as main residence (ie one and only home) = 123 months
Rented out the flat for 178 months

9 months exempt
Minus allowable expenses of £25,919.22 (buying/selling costs, lease extension premium and costs)
Basic rate tax payer
£12,300 CGT allowance

thank you.

JGB1955

My calculation is close to £19, 750.  Others will be along to put me right!

Dazed_and_C0nfused

How much of your basic rate band do you expect to use in the tax year you make the gain?

Interest and dividend taxed at 0% use up your basic rate band.

p00hsticks

https://www.gov.uk/tax-sell-property/work-out-your-gain

SXX

Thanks for all the responses.  It is the PRR bit that I need help with.
my total income for 2022-2023 tax year will be £1750.00 - so well within my tax-free personal allowance.

[Deleted User]

Assuming that all of the costs are allowable you have a gain of 280000 less 57500 less 25920 which calculates out as 196580. 

You declare this as the gain and claim PRR:

Owned for 292 months. You lived in it for 123 months and you can add another 9 for having so done making 132. 132/292 x 196580 is 88865 - the PRR. This leaves 107715 chargeable and you have your 12300 relief.

(Note that your periods of 132 and 178 do NOT add up to 292 I have assumed the 132 is correct but you can adjust if not). 

You have 60 days from contract to declare and pay the CGT and must also include on your 2022/23 tax return.

saajan_12

SXX said:

Hello - can someone please work out the CGT on the following please?

Bought flat for £57,500.
Sold for £280,000
Owned the flat for a total of 292 months
Lived in the flat as main residence (ie one and only home) = 123 months - 
Rented out the flat for 178 months
- 123+178 = 301 months. Have you already added the 9 months exempt into the 123? Were you living there for any of the last 9 months? 

9 months exempt 
Minus allowable expenses of £25,919.22 (buying/selling costs, lease extension premium and costs) - how much was the lease extension? quite high costs, though possible the lease was a large chunk. 
Basic rate tax payer 
£12,300 CGT allowance

thank you.

Gain = 280k - 57.5k - 25.9k = 196,581
PPR for 123/292 months = 42.1% of the gain = 82,803 (I'm assuming this includes the final 9 months without double couting)
Taxable gain = Gain - PPR - AA = 196,581 - 82,803 - 12,300 = 101,475

Since you have no taxable income, the full 37,700 basic rate band gets taxed at 18%, so your tax is 
   37,700 @ 18% =  6,786
+ 63,775 @ 28% = 17,857
= £24,643 tax

[Deleted User]

saajan_12 said:

SXX said:

Hello - can someone please work out the CGT on the following please?

Bought flat for £57,500.
Sold for £280,000
Owned the flat for a total of 292 months
Lived in the flat as main residence (ie one and only home) = 123 months - 
Rented out the flat for 178 months
- 123+178 = 301 months. Have you already added the 9 months exempt into the 123? Were you living there for any of the last 9 months? 

9 months exempt 
Minus allowable expenses of £25,919.22 (buying/selling costs, lease extension premium and costs) - how much was the lease extension? quite high costs, though possible the lease was a large chunk. 
Basic rate tax payer 
£12,300 CGT allowance

thank you.

Gain = 280k - 57.5k - 25.9k = 196,581
PPR for 123/292 months = 42.1% of the gain = 82,803 (I'm assuming this includes the final 9 months without double couting)
Taxable gain = Gain - PPR - AA = 196,581 - 82,803 - 12,300 = 101,475

Since you have no taxable income, the full 37,700 basic rate band gets taxed at 18%, so your tax is 
   37,700 @ 18% =  6,786
+ 63,775 @ 28% = 17,857
= £24,643 tax

Yes - we need to establish the correct period of ownership. The PRR is either 123/292 or 132/292. 

SXX

Thanks for the responses.

The lease extension was the large chunk.

I lived in the flat (as my one and only home) for 114 mnths + allowable final 9 mnths = 123 months for PRR purposes.

I need to pay the CGT by 6 December 2022 but I was planning on paying it before the 31 October 2022 in case there are any changes to CGT.  Any opinions on this anyone?

[Deleted User]

SXX said:

Thanks for the responses.

The lease extension was the large chunk.

I lived in the flat (as my one and only home) for 114 mnths + allowable final 9 mnths = 123 months for PRR purposes.

I need to pay the CGT by 6 December 2022 but I was planning on paying it before the 31 October 2022 in case there are any changes to CGT.  Any opinions on this anyone?

The rate will be determined by the legislation at the time of the disposal.

SXX

The rate will be determined by the legislation at the time of the disposal.

Good to know the above but I still might play it safe and just pay up before 31 Oct.