Capital gains tax calculation

Lewis_Gerolemou

Can anyone do a CGT calculation for me on a property sold recently, I don't know how the indexation works. The property was valued at £57,500 on 14th July 1992. It was sold on 24th October 2007 for £209,458 net. Three owners benefitted from the sale receiving £69,819 each, what is their taxable gain?

I would be much obliged for help on this. Thank you

CLAPTON

what happened to the house , who lived in it, was it let etc
give full information

Elaine_Wilson

The total unindexed gain is (209,458 - 57,500) = £151,958.

Indexation is applied to the acquisition cost and for the period from July 1992 to April 1998 amounted to 0.171, which gives £9,833. So the indexed gain is now £142,125. Each persons share is £47,375 assuming equal shares.

I assume that no-one has actually lived in the property and that no other reliefs are available. Also that no losses are available to be offset.

Taper relief is the final stage. The property has been owned for 9 complete years since April 1998 and you qualify for a bonus year as you held the property on budget day 1998. The gain is reduced by 40% to leave a chargeable gain of £28,425.

If there are no other gains then the annual exemption of £9,200 will be available reducing the taxable amount to £19,225.

Lewis_Gerolemou

Thanks Elaine much appreciated.