Please Help-capital Gains Tax On Rented Property

dont_want_to_be_in_debt

PLEASE CAN ANYONE HELP- We sold a flat finally after holding on until the negative equity disappeared. We cannot manage the very complicated forms and really need some advice. The tax authority say that although we made a loss on four of the eight years we rented out that we cannot claim this back. They have taken so long replying to our letters that they are now threatening us with a late payment fee if we do not pay them but we cannot work out how much to send them! please could anyone help we cannot afford an accountant and are only just holding onto the home we've got
Please please help anyone :mad:

fengirl_2

It is correct that the losses on lettings can only be carried forward against future profits.
If you could give more information about the sale proceeds and original cost, date of sale, etc, we can try and help you.

dont_want_to_be_in_debt

Thanks fen girl -
bought in 5/90
original purchase £50017.59
sale price £88500
soliitors costs £572
estate agents £1559
we received ££36342

We lived in flat til 1997 - 7 years. Sold flat in april 2006.

We made losses of £5119

I think may be entitles to private residence relief and taper relief but cannot work out rates or which applies first !
please help if can we are really panicking

jimmo

You are so not liable to Capital Gains Tax. This is a very rough and ready computation ignoring indexation and taper because you don’t actually need them. It really is good enough for your purposes.


As the 2 elements of exempt gain come to more than the gain you made nothing is chargeable.
If you want to check the principles I have used get yourself an IR283 here http://www.hmrc.gov.uk/helpsheets/ir283.pdf
If you have to complete Returns each of you should declare half the disposal proceeds, claim main residence relief of half the gain and show a chargeable gain of nil.
If you do get an enquiry into your return your evidence of prices and period of occupation and the computation really will be sufficient.

jimmo

Sorry, hope this works
Apr-06Disposal proceeds88500
costs of sale2131
Net proceeds86369
May-90Purchase50017
Gain36352
Period ow ownership16years
Exempt periods
occupied7
yearslast 3 years of ownership3
Total exempt period 10
Exempt gain"10/16 * 36352 = 22720
Lettings relieflet
9years
Exempt gain"9/16*36352 = 20448