CGT Private Residence Relief

Optimistic_Gardener

We're selling a property we currently rent out, but which we lived in from November 2001 until September 2010. 

I'm trying to roughly work out the percentage of profit on which the CGT will be payable. One online calculator said we'd not be taxed on 40% but I'm not sure that's correct?
I know the non-taxable amount is reducing to from £6k to £3k after April when we will be selling. 

If anyone could point me in the right direction I'd be very grateful. Thanks in advance.

pumas

Government website has an understandable calculator. You need to take into consideration your earnings, "We" you each get allowances.

Optimistic_Gardener

Thank you. I have looked a the gov one, perhaps I'll have another look!

propertyrental

The CGT tax rate (eg 40%) is not dependant on how long you lived there/let the property out, it is dependant on your income bracket.

The 'gain' (difference between purchase and selling prices) on which that tax rate is due, does depend on the dates of main residence etc, as well as discounting the final 18 (?) months, and of course your personal allowance (which as you say is reducing).

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

_Penny_Dreadful

@propertyrental it’s only the final 9 months of ownership now. 

Olinda99

you need to work out the total gain I either difference between buying and selling price less expenses and improvements

you are then allowed to pro rata this gain - I believe you are allowed the time that you lived there as main resinence plus nine months

the pro-rata'd gain is then added to your total income for the tax year - obviously less any CGT allowance

this means that some of the gain may well fall within your  20% tax brackets with the rest at 40% - it depends obviously on the amount of gain and your other income