CGT disposal

shauns_3

To avoid the new CGT rules I need to sell my property by the 5th April 2008. Can someone tell me if it is sufficient to exchange contracts by this date or do I need to complete the sale by then?

phlash

Date you receive the cash.

clutton_2

CGT goes down from 40% to 18% in april .......

subjecttocontract

clutton wrote: »

CGT goes down from 40% to 18% in april .......

.......but you loose taper relief and indexation.

Do not assume that because the tax rate goes down to 18% that it will mean less tax. I hope you have done accurate calculations.

clutton_2

i am not planning to sell - so it does not affect me at present

silvercar

Its definitely the date you exchange that counts, odd though that may seem.

shauns_3

Thanks for the replies.

I have owned the property for 16 years and mostly avoid the 40% rate so the new rules do adversely affect me. After all Gordon would not make a tax change that did not increase net revenue.

So phlash you are saying completion by the 5th April, although 10% would be received by my solicitors on exchange? I am querying this as I think some things like the qualifying dates for completed years of taper relief are actually based on exchange dates and not completion dates.
:beer:

shauns_3

Thanks silvercar our posts crossed.

Exchange seems right to me based on their previous interpretation of disposal date. But when did right ever come into tax rules.

:beer: :T

silvercar

Definitely the date of exchange that counts.

For a second opinion post on the tax board, jimmo is an ex tax inspector and he will confirm that it is the date of exchange.

From that time you are committed to the transaction.

DeepSporran

Here's a link to some HMRC FAQs:

http://www.hmrc.gov.uk/cgt/faqs-cgt-reform.htm#8



Q. I’m selling a property. What is the date of disposal?

A. Where you sell a property under an unconditional contract the date of disposal for capital gains purposes is the date on which you exchange contracts. Where the contract is conditional the date of the disposal is the date on which the last of the conditions is met.
Guidance is available in the Capital Gains Manual on conditional and unconditional contracts.

rebeccaj

for anybody wanting to work out if they'd be better off selling before or after April 5th, there's a good CGT calculator I found here that will give you an idea of which is best in your circumstances.