Capital Gains Tax calculation on rental property sale

boybeck

Would someone be kind enough to help me with a capital gains tax calculation on the sale of a house I used to live in, rented out and have now sold.

I just want to check I’m getting it right. 

Period of ownership - 288 months (01/08/99 - 01/08/23)

Period I lived there - 107 months (01/08/99 - 01/07/08)

Period let - 180 months (01/08/08 - 01/08/23)

Bought for £64,500

Sold for £240,000

Gross profit £175,500

Estate agency fees and legal costs - £5,000

I am a basic rate taxpayer, but with this house sale, it may push me into higher rate?

Many thanks.

Dazed_and_C0nfused

A key factor could well be how much of your income tax basic rate band has been used.

This includes interest and dividend income taxed at 0% within the basic rate band.

If there is significant capital which generates interest in the same tax year this will be an even bigger factor.

You can of course manipulate the date interest interest is paid by carefully choosing the term of the account used and when it credits Amy interest.

And the basic rate band itself can be increased with eligible pension contributions and Gift Aid payments.

The usual experts wil no doubt answer the specific CGT calc question idc 😀

Jeremy535897

Gain £170,500. Deemed occupation as main residence is 107 + 9 = 116 months so chargeable gain is 170,500 x 172/288 = £101,826. Annual exemption £6,000 taxable gain £95,826. Your basic rate is £37,700. If it were all available, the tax would be £37,700 at 18% plus £58,126 at 28% = £23,061.28, but to the extent your basic rate is used against income, the tax on that part will rise from 18% to 28%. This will need to be reported and paid within 60 days of completion:

https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-sold-a-property-in-the-uk-on-or-after-6-april-2020

boybeck

That’s so helpful, thank you.

boybeck

Could I ask a further question about capital gains tax.

The property is solely in my name.

Could we also use my civil partner’s CGT allowance of £6,000, even though their name is not on the mortgage and deeds. 

[Deleted User]

boybeck said:

Could I ask a further question about capital gains tax.

The property is solely in my name.

Could we also use my civil partner’s CGT allowance of £6,000, even though their name is not on the mortgage and deeds. 

Afraid not. The time to have done that to benefit from their annual exemption and any remaining basic rate band would have been well before any intention to sell.