Capital gains tax

mangrego

Hi.
Can someone explain to me how much relief  I would get if I sell my house. I bought the house in 1988 and lived in it until 9 years ago it has been rented to tenants meaning I lived in it for 28 years, I paid £40000 for it and it's worth around £230000 now  can someone explain  how much if any Capital gains tax is payable.? And how do I work out the relief etc, Thanks for any replies.

p00hsticks

Have you seen this ?
Tax when you sell property: Work out your gain - GOV.UK

Nomunnofun1

mangrego said:

Hi.
Can someone explain to me how much relief  I would get if I sell my house. I bought the house in 1988 and lived in it until 9 years ago it has been rented to tenants meaning I lived in it for 28 years, I paid £40000 for it and it's worth around £230000 now  can someone explain  how much if any Capital gains tax is payable.? And how do I work out the relief etc, Thanks for any replies.

Let’s say that you bought it in April 1988, moved out in April 2016 and sell it in April 2025. 

Your gain is £190000 less, say, £5000 in costs of buying and selling - gain before reliefs £185000. Costs of improvements can also be deducted. 

Your total ownership is 444 months. 

You lived in it for 312 months and you can add 9 as a concession for having lived in it at some point. 

Private residence relief is 321/444 x £185000 = 133750 

Your chargeable gain before annual exemption is 51250. Tax payable would depend on your other income, at worst £11580.

Gain must be declared and tax paid within 60 days.

https://www.gov.uk/report-and-pay-your-capital-gains-tax

mangrego

Hi
Thanks for your reply. Since I have rented the property I have spent maybe £20000 on renovations am I able to claim this back? Thanks for replies.

mangrego

Another quick question what is Annual exemption and how much yearly is that? Thanks for replies.

silvercar

mangrego said:

Another quick question what is Annual exemption and how much yearly is that? Thanks for replies.

Current year is £3000. You can only use the exemption in the year that you sell, you can't add unused exemptions from previous years.

silvercar

mangrego said:

Hi
Thanks for your reply. Since I have rented the property I have spent maybe £20000 on renovations am I able to claim this back? Thanks for replies.

Maintenance, even if it improves things goes as an expense against rental income. Improvements that are new to the property count against capital gain. So updating an old fitted kitchen with an new one, re-doing an existing bathroom, painting and decorating would all be maintenance. Installing a conservatory when there wasn't one before, adding an en-suite would be capital improvements.

Nomunnofun1

mangrego said:

Hi
Thanks for your reply. Since I have rented the property I have spent maybe £20000 on renovations am I able to claim this back? Thanks for replies.

You can’t ’claim this back’. Allowable expenditure would reduce your gain before applying private residence relief as I stated above

sheramber

What were the renovations?

Did you claim anything as expenses against your rental income when reporting it to HMRC?