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  • FIRST POST
    • DippityDooDah
    • By DippityDooDah 27th Dec 17, 3:48 PM
    • 29Posts
    • 103Thanks
    DippityDooDah
    CGT and Letting Relief
    • #1
    • 27th Dec 17, 3:48 PM
    CGT and Letting Relief 27th Dec 17 at 3:48 PM
    working out my OH self assessment and have a question regarding CGT and Letting Relied that I hope one of you good peple will know the answer to.

    House bought in 1997 from Council for 17,500, 70% discount at time so market value was 58k
    lived in as family home until 2010. Market value at this time 90k
    rented out from 2010-2017 when it was sold on 31/3/17 for 90k.
    Deductable costs 2500 (selling fees, solicitors etc)

    I have worked out that he has Private Residence Relief for 14.5 of the 20 years he owned it (13 years lived in plus 18 months allowance)

    i work out the chargable gain to be on 19,250, which is approx 3850 in tax.

    how do i know if we are eligible for Letting Relief? if he is eligible for this it would mean that there was no tax owed?

    Also, can CGT be offset against tax allowance? He has only earner 5400 in 16/17 so has not used his full tax allowance.

    any help would be very much appreciated.

    thank you in advance
    DDD x
Page 3
    • Lamps08
    • By Lamps08 19th Jul 19, 8:03 AM
    • 3 Posts
    • 0 Thanks
    Lamps08
    This is a head scratcher for me - reason being is that the property rental is currently the main part of my pension - and because we don’t have a crystal ball on life expectancy I currently don’t plan on disposing in 2027.

    A) If I sell/exchange contracts by 05 April 2020 – I have calculated that zero CGT is due (using the 12,000 allowance)

    B) If I sell in April 2022, based on the new legislation and assumed sale price was still 300,000, 5,947 CGT will be due (@28% using the 12,000 allowance)

    C) If I sell in April 2027, based on the new legislation and assumed sale price was still 300,000, 13,315 CGT will be due (@28% using the 12,000 allowance)

    D) If I sell in April 2037, based on the new legislation and assumed sale price was still 300,000, 23,571 CGT will be due (@28% using the 12,000 allowance)

    E) If I sell in April 2047, based on the new legislation and assumed sale price was still 300,000, 30,369 CGT will be due (@28% using the 12,000 allowance)


    In summary I could go with: -

    Option A, avoiding CGT, and buy a new rental property for 300k incurring 14k SDLT + other costs

    Option B, incurring 5,947 CGT (based on the new legislation) and buy a new rental property for 300k incurring 14k SDLT (assuming current rules) + other costs. Benefit of doing this would be to retain the current tenants who have rented for c3 years and don’t appear to have alternative plans.

    Option E, incurring 30,369 CGT (based on the new legislation) and buy a new rental property for 300k incurring 14k SDLT (assuming current rules) + other costs

    Something else?


    I appreciate the opportunity to bounce this one around. Thoughts?
    Last edited by Lamps08; 19-07-2019 at 8:38 AM.
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