CGT Taper Relief

tonome

Let's say I've owned a second home for 20 years. I'm about to sell it and realise a capital gain.
Because I'm selling it now in 2008/9, does that mean taper relief is not relevant?
Is it a simple calculation of selling price (less selling costs) less orginal cost less PA £9,600 and then 18% thereof?
Is all the taper relief lost?
Thanks you - Tonome

silvercar

Taper relief has gone. It would have given you 40% off the capital gain and then you would have paid at your marginal rate. So at 40% tax the rate would have been 60 x 40 =24% for the amount within the basic rate you would have paid 60 x 20 = 12%. Whether you win or lose depends how much of the gain would have been within your basic rate band.

Is it a simple calculation of selling price (less selling costs) less orginal cost less PA £9,600 and then 18% thereof?

More or less correct. You can knock off buying costs.

If you ever made a declaration on which one was your home, you can now change the declaration to make this one your home and get 3 years PPR relief. If you didn't make a declaration during the first 2 years of ownership that avenue is closed.

Is actually going to live in it for a few months an option? That would give you 3 years PPR?

Are you married? Transferring half to your spouse before sale would mean another 9.6k CGT allowance. In fact transferring before 5/4/08 would have meant you could access some indexation relief; another relief now abolished.

Slim

Don't forget to deduct any "enhancement" expenditure before arriving at the chargeable gain. Depending on circumstances this for a property could be considerable.