Selling a property; unsure of deductions 😔

big_gus

Due to a family issue I have to sell my house (currently being rented out) and as a newbie to this I was hoping the more experienced of you could advise as to my position/my expectations re sales. 

Facts: bought in 2004 and lived in til 2008. Moved out in 2008 to current property and rented the initial property. Mortgage outstanding circa 150k. Expected sale price 500-550k. 

The only thing I know for certain is that I’ll pay the going rate/percentage to whichever Estate Agent is instructed. After that, I am unsure of remaining costs involved (second property tax? Any extra fees for selling over 500k?).

Apologies if these are silly questions. I haven’t sold a house since 2003 when rules weren’t quite as tricky. 

Thanks for any help and, of course, if more info is required then please ask. 

poseidon1

You will undoubtedly have a Capital gains tax (CGT) liabilty based on your proceeds of sale ( less selling related fees) less  original purchase price. You will also have an allowance for the period you occupied the residence as your home. Your mortgage is irrelevant here ( not an allowable deduction).

CGT is payable within 60 days of the completed sale ( an online process),  and also reportable on a self assessment tax return. Given this, you will likely benefit from the services of a professional tax accountant to calculate the gain and perhaps submit the online return on your behalf. The cost of such services are also a tax deduction from the property gain.

big_gus

Thank you, Poseidon. So would you be able to calculate what you think the final figures would be, or would you need more info from me? I need to share with family what the likely proceeds would be, and then work out a split 😕

poseidon1

big_gus said:

Thank you, Poseidon. So would you be able to calculate what you think the final figures would be, or would you need more info from me? I need to share with family what the likely proceeds would be, and then work out a split 😕

Others on this forum maybe inclined to try, but  professional tax accountants do this as their
 day job, so my advice remains to seek professional ( insured) advice to be confident of the correct outcome.

big_gus

Of course, I have an accountant who completes my tax return. However, he also charges me just to ring/email him so I was just looking for a rough guess. If anyone else on the forum has any idea, please let me know. 

Otherwise, thanks for your help, Poseidon. Much appreciated.  

p00hsticks

There's a calculator her if you plug in the numbers
Tax when you sell your home: Work out your gain - GOV.UK

silvercar

The one figure missing is the purchase price. With that info I’m sure there are people on here who will do a rough calculation for you. Not withstanding the good advice to consult an expert, I can understand you wish to have an idea of the tax you will face.

big_gus

My apologies. Purchase price in 2004 was 315k. Thanks. 

big_gus

Bump. Thank you for any comments  🥹

RAS

The primary figures are

Sale price, minus purchase price, buying and selling costs (include accountant) and also minus cost of improvements. Replacing a central heating system isn't improvement, installing the first system is.

The proportion of the time you occupied the property as a percentage of the time owned (actual months plus 9).  If the property is now empty and sale proceeding, you can make a decent guess, depending on whether you are moving back in until the sale completes. 

Bigphil1474

You'll probably be looking at between £30-£60k in CGT, based on info provided, but you should just try the link provided above and it will give you a more accurate figure. You will need your gross income figures as well.