Confusing capital gains

Barnysandy

Hopefully there are some capital gains experts on this forum that  can help...

Bought a house with now ex husband in 2009, relationship breakdown meant house was rented out from 2011 to 2016 whilst settlement agreed and title now in my sole name.  Moved back to property in 2016 as main residence and sold in 2018.  Is any capital gains due???

Any help greatly appreciated 

_Penny_Dreadful

Barnysandy said:

Hopefully there are some capital gains experts on this forum that  can help...

Bought a house with now ex husband in 2009, relationship breakdown meant house was rented out from 2011 to 2016 whilst settlement agreed and title now in my sole name.  Moved back to property in 2016 as main residence and sold in 2018.  Is any capital gains due???

Any help greatly appreciated 

Potentially because the property wasn’t your only or main home for the whole time you owned it so you won’t get Private Residence Relief for the 2011-2016. If you sold the property in 2018 then you’re very late in declaring any gains to HMRC. 

ashleyj722

Barnysandy said:

Hopefully there are some capital gains experts on this forum that  can help...

Bought a house with now ex husband in 2009, relationship breakdown meant house was rented out from 2011 to 2016 whilst settlement agreed and title now in my sole name.  Moved back to property in 2016 as main residence and sold in 2018.  Is any capital gains due???

Any help greatly appreciated 

You will get fined if you declare CGT on it now.  There is meant to be a 60 day reporting period for CGT on house purchases.  Although your residence relief might reduce that bill depending on the ratio of time you spent living there compared to time it was rented out.   For example if you made a profit of £24000 after estate agent fees and costs of repairs and rennovations and you get your tax free allowance of £12600 (until 5th April). Then you would pay CGT on £11400 before you apply the residence relief. Then you had 10 x 12 months (10 years) 120 months you rented it out and say you owned it for a total of (20x12 month 240 months.  You would get relief on the difference between the time you let it out and the time you lived in it.  so it would be 120 months + 9 months at the end / 240 months which gives you a ratio of 0.53.  11400 x 0.53 is £6042 and take that away from your profit   which gives you a tax liability of £5358.  If you are a basic tax payer that is 20% of £5358 which is  £1,071.6 or if you are a higher tax its 28% of £5358 which is £1500.24        

RAS

Bought in 2009, sold in 2018= 9-10 years, 108-120 months.

Lived in it 4-5 years, so 48-60 months. 

All depends on exact months?

The 9 months letting relief is more useful.

Query. Between 2009 and 2016, the property was in joint names but let out 2011 until 2016. Then transferred to sole name. Should that have triggered a CGT liability in 2106? For one or both partners?

dimbo61

You sold the property  5 years ago !
Why are you asking about Capital gains tax now ? 

Barnysandy

ashleyj722 said:

Barnysandy said:

Hopefully there are some capital gains experts on this forum that  can help...

Bought a house with now ex husband in 2009, relationship breakdown meant house was rented out from 2011 to 2016 whilst settlement agreed and title now in my sole name.  Moved back to property in 2016 as main residence and sold in 2018.  Is any capital gains due???

Any help greatly appreciated 

You will get fined if you declare CGT on it now.  There is meant to be a 60 day reporting period for CGT on house purchases.  Although your residence relief might reduce that bill depending on the ratio of time you spent living there compared to time it was rented out.   For example if you made a profit of £24000 after estate agent fees and costs of repairs and rennovations and you get your tax free allowance of £12600 (until 5th April). Then you would pay CGT on £11400 before you apply the residence relief. Then you had 10 x 12 months (10 years) 120 months you rented it out and say you owned it for a total of (20x12 month 240 months.  You would get relief on the difference between the time you let it out and the time you lived in it.  so it would be 120 months + 9 months at the end / 240 months which gives you a ratio of 0.53.  11400 x 0.53 is £6042 and take that away from your profit   which gives you a tax liability of £5358.  If you are a basic tax payer that is 20% of £5358 which is  £1,071.6 or if you are a higher tax its 28% of £5358 which is £1500.24        

This is very useful, thankyou

Barnysandy

RAS said:

Bought in 2009, sold in 2018= 9-10 years, 108-120 months.

Lived in it 4-5 years, so 48-60 months. 

All depends on exact months?

The 9 months letting relief is more useful.

Query. Between 2009 and 2016, the property was in joint names but let out 2011 until 2016. Then transferred to sole name. Should that have triggered a CGT liability in 2106? For one or both partners?

Property in my sole name from 2014.  Could you please explain the 9 month relief and how to calculate.

Thank you in advance

theartfullodger

Dunno about anyone else but I'm in favour of all taxes being declared and paid promptly and on time.  'tis the law - the country needs the money! Thus ashamed to announce I was fined £100 for late self assessment of Income tax  in February. No excuses, my failure - stupid failure.

Yes, CGT to be declared & paid within 60 days.  Currently juggling selling off shares with losses to compensate other funds selling with capital gains.  

There are of course those who both only pay some taxes "voluntarily" and/or are exempt (IHT).

macman

No one can help you with the calculation unless you post the purchase and sale prices and the exact dates. You can also offset the purchase and sale costs, and any improvement costs, against the gain.You will also now incur a fine for the late declaration: £300 or 5%, whichever is the greatest.
The gain may be within the annual CGT limit, in which case nothing to pay.

RAS

@madman

Would the fact that the house was bought in joint names, lived in by both, vacated and rented out by both, then transferred to the OP's sole ownership in 2014, result in a CGT liability for both parties in 2014?

And then sole responsibility by the OP for CGT for the rental period 2014 - 2018?

Barnysandy

RAS said:

@madman

Would the fact that the house was bought in joint names, lived in by both, vacated and rented out by both, then transferred to the OP's sole ownership in 2014, result in a CGT liability for both parties in 2014?

And then sole responsibility by the OP for CGT for the rental period 2014 - 2018?

Hi,

As the ex moved out and stopped paying his share of a joint mort forced my letting out whilst settlement agreed.  Ex did not profit from the income so I'm told he did not benefit and therefore has no CGT to pay.  Possibly poor advise taken at the time of sale in 2018 was that I did not owe any CGT as I had sold whilst residing and therefore my main residence.