Am I exempt from Capital Gains Tax

lz57s9

Hi, A freind of mine is trying to find out if he would be exempt from having to pay CGT now that he is 65?.

He is selling a business/property for about £300,000

Any ideas? i have looked around the gov website with no luck?.

Dan

dunstonh

Age has nothing to do with it. The only difference at 65 is the age allowance (for income tax).

cheeky_lil_monkey

I have a quick question myself - as far as I'm aware this would be free from CGT but thought I'd see if anyone else has been in the same situation and has had to fight any battles with regards to this.

We have seen a property we like. Our house is not yet on the market. It would most likely take longer for our place to sell than the vendor would be looking in order to get a sale.
I know there are bridging loans etc. out there, but what would happen if we were to own 2 properties at the one time. One on the market and one we'd bought outright (due to equity, savings and the ability to borrow money from parents), with the knowledge we could transfer our existing mortgage at an increased amount to the new property?

The sale of the home would be exempt as it's our only/main home, but are we likley to face any issues where we're being chased for CGT due to owning 2 homes at one point for a very short time.

The other option is to transfer our existing, take a btl mortgage on our place and rent it for 6mths - 1yr. If we then sold it, where would we stand re: CGT and income (neither of us are in the higher tax band but do pay tax) tax?

dunstonh

You will have no CGT to pay due to the timescale involved. If you rented it out, you would potentially have income tax to pay (surplus income over interest paid on mortgage. Note not the capital repayment part. Certain business expenses can be offset as well).

EdInvestor

cheeky_lil_monkey wrote: »

are we likley to face any issues where we're being chased for CGT due to owning 2 homes at one point for a very short time.

No.If it bothers you, you can always advise the Revenue that your new home is now your tax exempt PPR.There are a raft of reliefs on BTLs which were formerly your main home, such that it's rare to have to pay any CGT on their eventual sale.

takoo

Hi Lz57s9

Is your friend selling his business or is he selling a business property? If the sale is a property investment I pretty sure he will be liable to CGT - subject to non-age related exemptions and reliefs.

For a business I seem to recall that there was /is an exemption/relief on retirement - but I believe that it has been withdrawn (a few years' ago).
Takoo

EdInvestor

lz57s9 wrote: »

Hi, A freind of mine is trying to find out if he would be exempt from having to pay CGT now that he is 65?.He is selling a business/property for about £300,000

He would be liable.At the moment there is a big fuss about planned changes to CGT particularly as it affects the sale of small businesses by people retiring.

The Chancellor plans to reduce the rate of CGT from as high as 40% to a flat 18%, but he also intends to abolish reliefs (indexation, taper relief) which can bring the 40% rate down to more like 10% in some cases.

Your friend needs to get advice from an accountant on whether he will be better off selling now - under the old rules - or after April, when the new rules come in.

Riq

I had a lecture in Capital Gains Tax yesterday for ACCA. I understand this!! Oh my god, I actually learnt something!!