CGT and LBTT

PoGee

On doing online research, it says that LBTT is deductable for CGT purposes. My question is - is ADS , which some online platforms say is a form of LBTT, also  an allowable deduction?

Jeremy535897

It should be.

Nomunnofun1

https://www.gov.uk/capital-gains-tax-businesses/work-out-your-gain#:~:text=Costs%20you%20can%20deduct%20include,you%20can%20reclaim%20the%20VAT)

PoGee

Thanks for replies. I do a tax return each year for rental income. Will it be ok to do the CGT calculation within the same tax return? There was no CGT tax to pay when my siblings and I sold our mother's property. I did the calculation within the same tax return that year. There will be some tax to pay with the property I'm selling at the moment so wondered if the procedure would be different.

Nomunnofun1

PoGee said:

Thanks for replies. I do a tax return each year for rental income. Will it be ok to do the CGT calculation within the same tax return? There was no CGT tax to pay when my siblings and I sold our mother's property. I did the calculation within the same tax return that year. There will be some tax to pay with the property I'm selling at the moment so wondered if the procedure would be different.

You have no option. The self-assessment return is a declaration of all income and gains for the relevant tax year. 

PoGee

Thanks Nomunnofun1. It's simpler for me to do everything (rental income tax + CGT) in one document.

PoGee

Similar properties for sale, within an area of 1-3 streets, are on at offers over 55k, 70k, 63k and a tenement at 40k. I think that's where the mortgage valuer got information from. The mortgage valuation was 62k, for the flat I'm selling.

Bookworm225

PoGee said:

There will be some tax to pay with the property I'm selling at the moment so wondered if the procedure would be different.

the procedure (even in Scotland) is very different as you must declare and pay any CGT due within 60 days of the completion date of the sale. Miss that deadline and you get an automatic penalty.
as you are already in annual self assessment you must also then repeat the entire calculation on your tax return, but unless something has changed on the values by then, you obviously will not have to pay the tax a second time.  

Report and pay your Capital Gains Tax: If you sold a property in the UK on or after 6 April 2020 - GOV.UK

Keep_pedalling

PoGee said:

Thanks for replies. I do a tax return each year for rental income. Will it be ok to do the CGT calculation within the same tax return? There was no CGT tax to pay when my siblings and I sold our mother's property. I did the calculation within the same tax return that year. There will be some tax to pay with the property I'm selling at the moment so wondered if the procedure would be different.

No, CGT on residential property needs to be paid within 60 days of the sale, so you can’t wait until it’s time to do this financial year’s return.

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

Jeremy535897

In your shoes I might be tempted to say that the average between the mortgage value and the Zoopla value is £74,000, and use that, explaining what you have done. After all, the capital loss you would generate using the mortgage value is useless unless you have another transaction with the same person that produces a gain.

Nomunnofun1

Keep_pedalling said:

PoGee said:

Thanks for replies. I do a tax return each year for rental income. Will it be ok to do the CGT calculation within the same tax return? There was no CGT tax to pay when my siblings and I sold our mother's property. I did the calculation within the same tax return that year. There will be some tax to pay with the property I'm selling at the moment so wondered if the procedure would be different.

No, CGT on residential property needs to be paid within 60 days of the sale, so you can’t wait until it’s time to do this financial year’s return.

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

Yes - by way of clarification on my earlier post - it must also be included on the tax return which, of course, will be for 2025/26.