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  • FIRST POST
    • TallGirl
    • By TallGirl 6th Aug 18, 9:08 AM
    • 4,297Posts
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    TallGirl
    How much capital gains tax should I move back in?
    • #1
    • 6th Aug 18, 9:08 AM
    How much capital gains tax should I move back in? 6th Aug 18 at 9:08 AM
    Dear wise people hope you can help I'm in a dilemma about capital gains tax and my former marital home. Issue is should I move back in before selling if so for how long or doesn't it matter on the actual tax due.

    I've tried to read up and I understand the time you lived in the property as your main and principle Home doesn't counts and I think there's 18 months on top of this. My figures looks as follows hope ive covered everythingM

    Bought in 1995 86500
    Mortgage free
    Spent 30k on extension, 20k on bathrooms and some on new windows whilst I lived there.

    Left April 15, seperate from husband who then left in Aug 16, he passed away so I became sole owner and rented it out from Oct 16.

    It's still rented out, I'm looking to sell in Aug 19 it's worth now about 350k I would like to offer the tenant to buy it give them time to get finances in place otherwise I'll move in myself and sell it with no tenants. I'm fully aware of my responsibilities as a landlord and everything is in place to serve the correct notices my other half is a housing solicitor.

    My question is how much capitals gains tax will I need to pay, I know there is an allowance which I haven't used. I know it sounds clueless but I own index fund investments outside of ISA and pensions but as long as I don't sell them in that year I assume I have the full allowance.

    Any help much appreciated with this so torn as to moving back and getting attached only to sell the property.

    Thanks
Page 1
    • getmore4less
    • By getmore4less 6th Aug 18, 12:34 PM
    • 32,664 Posts
    • 19,652 Thanks
    getmore4less
    • #2
    • 6th Aug 18, 12:34 PM
    • #2
    • 6th Aug 18, 12:34 PM
    back of the envelope owned 24y 264 gain(* see below as death changes the gain)

    you lived there 20 years hubby 21 years roughly 3 years let
    18 month extra

    4/24th is close, say 44k of the gain before, personal allowance, lettings relief and capital spent relief.

    Chances are when the full(to the months) calculations are done it will be close to zero.


    * Then the hubbies portion get rebased on death to current value you should not be looking at the full gain anyway for his bit only the gain from DOD.
    Last edited by getmore4less; 06-08-2018 at 12:38 PM.
    • 00ec25
    • By 00ec25 6th Aug 18, 1:07 PM
    • 6,802 Posts
    • 6,420 Thanks
    00ec25
    • #3
    • 6th Aug 18, 1:07 PM
    • #3
    • 6th Aug 18, 1:07 PM
    as above the gain needs to be split into

    a) the full gain x your share of the property for the entire time you owned it
    and
    b) the bit of gain relating to the date you acquired your (ex) husband's share on his death

    you then need to add those two gains together to get the final taxable gain from which you can, if still relevant, deduct your CGT exempt amount

    as you can claim PRR and LR, you may find this illustration of the calculation mechanics useful?
    https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2
    • TallGirl
    • By TallGirl 6th Aug 18, 6:53 PM
    • 4,297 Posts
    • 8,890 Thanks
    TallGirl
    • #4
    • 6th Aug 18, 6:53 PM
    • #4
    • 6th Aug 18, 6:53 PM
    Thank you so much 00ec25 really useful sounds so complicated those calculations would you advice getting an accountant to do the tax calculations nearer the time or would that be a financial adviser who would be the best profession to engage on this.
    • kinger101
    • By kinger101 6th Aug 18, 9:05 PM
    • 4,427 Posts
    • 6,144 Thanks
    kinger101
    • #5
    • 6th Aug 18, 9:05 PM
    • #5
    • 6th Aug 18, 9:05 PM
    An accountant or chartered taxation consultant would be the best to ask if you're unsure with the calculations. I wouldn't ask a financial adviser. It's akin to asking a bricklayer to do plastering.
    • TallGirl
    • By TallGirl 7th Aug 18, 1:33 PM
    • 4,297 Posts
    • 8,890 Thanks
    TallGirl
    • #6
    • 7th Aug 18, 1:33 PM
    • #6
    • 7th Aug 18, 1:33 PM
    Great thank you so much really has been most helpful I think I!!!8217;ll offer the tenant the option to buy when I know for certain what I!!!8217;m doing which will be April 19.
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