Capita Gain Tax calculations - Selling in May 2008

computerbar

Hi
One of my friend (self employed) has asked me to calculate CGT for him as he is selling he commercial building.

bought in Aug2000 for £210,000
Offers are coming in region of £1,200,000 (say sale complete in May2008)

What would be CGT under this new rule of flat rate 18%.

I am familiar with the Indexation and Taper relief calculation.
What is the procedure now to calculate?
Do you just disregard the Taper relief now from 2000 to Mar2008??

What are the conditions for entrepreneur relief of £1m to qualify for 10%?

I know all the information are all over the web but I would appreciate if any body could share their thoughts.

Regards

Petmidget

In very brief

Sale less costs = £990,000.
Deduct costs of sale and purchase aswell.
Tax is 18% on what is left, after personal allowance.

Under old rules commercial property qualified for business relief if it was used for a "qualifying purpose" by anyone not just the owner.

Under new Entreprenuer relief, it must be used for "qualifying purpose" by the owner ie not let out.

If it qualifies, then no tax but nearly entire lifetime relief used up. But to be fair the relief will probably be changed in 10 years or less, so goalposts may change on that one.

computerbar

thanks

OK this is going to be a big tax bill as it is Buy to Let property.

Is this qualify for roll over relief?
Is it possible to invest this money in buying a property abroad?


regards

johnllew

computerbar wrote: »

OK this is going to be a big tax bill

The consolation is the huge profit on the deal.

zackariah_2

No residential property is not a class of asset that qualifys for rollover relief.

Yes you can invest overseas but there are no tax breaks as such.

Andrew - Chartered Tax Adviser

computerbar

zackariah wrote: »

No residential property is not a class of asset that qualifys for rollover relief.

Yes you can invest overseas but there are no tax breaks as such.

Andrew - Chartered Tax Adviser

sorry for not explaining in detail.

The property is a commercial property rented out to a supermarket chain.
the interested in buying it. So it is not a residential property.
Can the proceeds from this property sale be invested in buying a residential property to let overseas in UAE or eastern Europe.

In short what would be the best way to avoid paying the CGT and reinvest it to make use of roll over relief :rolleyes:.

regards