HL CGT Calculator

[Deleted User]

Hi,

can someone explain to me how the HL CGT Calculator arrives at the Taxable gain figure.

I have used the following data:

Date of purchase: 19/01/1994
Cost 2345
Value 30975
Owner 1
Income 0
Personal Asset

I can understand the Initial Gain 30975 - 2345= 28630

I can understand the tax on 16965.54
(2230 @ 10%) = 223 + (14735.54 @ 20%) = 2974.11 = 3170.11

so far so good.

To get at the taxable gain figure I tried using the indexation figure of 0.151 for Jan 94,
and then 90% taper relief for 4 whole years (scroll down HL page), but can’t get near the HL figure.

Where am I going wrong, any explanation appreciated.

Thanks.

Pennywise

Your taper relief isn't right.

Where do you get your "4 whole years" from - you should have 9/10 full years between 1998 and the date of sale which gives you 35% or 40% taper relief, meaning you are taxed on 60% or 65% of the gain.

[Deleted User]

Hi,

thanks, Pennywise I think I've got it now, I was taking year of purchase, 94, from 98, thus the 4 years.



So,

value 30975
- 2699 (2345 + (2345*0.151))
= 28276
* 60%
= 16965.60

there would still be the cgt allowance of 9200, so tax would be on 7765, correct?

I think the HL calculator is a bit misleading as it doesn't use the allowance, though I would've still been wrong. :rotfl:

Thanks again.

silvercar

taper relief is 40% for anything owned before 1998.

Remember you can also deduct buying and selling costs as well as improvements (but not maintenance).

Your calculation looks correct.

I assume you have exchanged, or will exchange prior to 5 April; if not the calculation is a simple 18% of the gain less your CGT allowance of 9600 (2008-09 figure) with no indexation or taper relief.

[Deleted User]

Hi,

thanks for your reply silvercar, I thought it was indexation prior to 1998 and taper relief after.

I'm not actually going to be selling, I was just trying out the HL calculator and wanted to understand the workings.

I had thought about Bed & ISA, for this year and next, but I think the charges would outweigh the savings, though may have another look at things.

Edit:

Do you know if the Bed & ISA covers gain since original purchase, or only gains made since being ISA wrapped?

Thanks again.

silvercar

I thought it was indexation prior to 1998 and taper relief after.

It is, I didn't explain clearly.

You get indexation upto 1998 and taper relief after, but if you owned the property in March 1998 you get 10 years taper relief not 9. This was an introductionary bonus year but as time is passing you would anyway become entitled to it by virtue of 10 years ownership.

CLAPTON

[Deleted User] wrote:

Hi,

thanks for your reply silvercar, I thought it was indexation prior to 1998 and taper relief after.

I'm not actually going to be selling, I was just trying out the HL calculator and wanted to understand the workings.

I had thought about Bed & ISA, for this year and next, but I think the charges would outweigh the savings, though may have another look at things.

Edit:

Do you know if the Bed & ISA covers gain since original purchase, or only gains made since being ISA wrapped?

Thanks again.

If you're not actually selling then its rather acedemic as the rules change on 6th April and indexation and taper relief dissappear.

[Deleted User]

Hi,

thanks CLAPTON, yes understand, though was still trying to suss out the workings of the HL calculator.

Even in my wee example, looks as though the Labour Goverment is going to reap in more in taxes, thought they were all for the working man, maybe working man should not own shares?

Thanks