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  • FIRST POST
    • ZZaffy
    • By ZZaffy 15th Apr 19, 11:53 AM
    • 81Posts
    • 22Thanks
    ZZaffy
    Capital Gains and selling
    • #1
    • 15th Apr 19, 11:53 AM
    Capital Gains and selling 15th Apr 19 at 11:53 AM
    I am selling my house. I let it for a few years so I will have to pay Capital Gains.
    Do I contact HMRC and inform them I need to pay Capital Gains? Or do HMRC automatically send me the relevant forms after I have sold?
Page 1
    • Slithery
    • By Slithery 15th Apr 19, 12:00 PM
    • 1,468 Posts
    • 2,299 Thanks
    Slithery
    • #2
    • 15th Apr 19, 12:00 PM
    • #2
    • 15th Apr 19, 12:00 PM
    You work out how much you owe and then pay them the money.
    https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

    It's down to you to submit the correct figures, they won't help you with this.


    If you can post the following information we can give you a hand...


    Date of purchase MMYYY?
    Price of purchase?
    Dates lived in/rented MMYYY?
    Estimated sale price?
    Estimated sale date MMYY?
    Current annual earnings?
    Any other capital gains in the tax year that you sell?
    Last edited by Slithery; 15-04-2019 at 12:04 PM.
    • 00ec25
    • By 00ec25 15th Apr 19, 12:54 PM
    • 7,942 Posts
    • 7,655 Thanks
    00ec25
    • #3
    • 15th Apr 19, 12:54 PM
    • #3
    • 15th Apr 19, 12:54 PM
    you previously (still do?) let the property therefore presumably you already submit annual tax returns?

    if so, you are required to add in the capital gains tax pages to your next tax return and report it that way (there is no other option if already required to do a tax return)
    https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

    if you no longer do a tax return (because HMRC told you to stop, not because you decided to stop yourself) then you still have to report it as per the link above


    you call it "your house" which implies you may have lived there yourself as your main/only home at some point in time? If so, you can claim both private residence relief and letting relief which is why the poster above is asking for the dates and info requested.
    • ZZaffy
    • By ZZaffy 15th Apr 19, 2:19 PM
    • 81 Posts
    • 22 Thanks
    ZZaffy
    • #4
    • 15th Apr 19, 2:19 PM
    • #4
    • 15th Apr 19, 2:19 PM
    Thanks 00ec25
    Sorry if my post is not clear. Does this help?
    I bought the house in 1981 and lived in the property.
    I moved out and let it from1989-2000 and then I moved back in.
    I have owned property for 38 years.
    So therefore I lived in property for 28 years and let it for approx. ten-years.
    I am living in the property now.
    Every year I do a tax form. And I used to submit letting property income. So HMRC have all the info.
    I am now going to sell my property and I will have to pay capital gains on those ten-years of letting.
    My question was do I tell HMRC I owe them capital gains or will they automatically send me the relevant information when I sell my property?
    Slithery answered the question for me. It is down to me to inform HMRC that I owe capital gains.
    I thought what with the computer age and HMRC having all my letting income details that they would inform me.
    Thank you for your interest. All info is much appreciated. I think I will hire an accountant to finalise affairs but I want to try to understand the complexities.
    I understand, I can claim solicitors fees for selling the house but that's about it. I'm on a learning curve at the moment so please excuse my nave questions.
    • ZZaffy
    • By ZZaffy 15th Apr 19, 2:22 PM
    • 81 Posts
    • 22 Thanks
    ZZaffy
    • #5
    • 15th Apr 19, 2:22 PM
    Thank you
    • #5
    • 15th Apr 19, 2:22 PM
    It will take me a while to find the exact months.
    Thank you
    • 00ec25
    • By 00ec25 15th Apr 19, 6:57 PM
    • 7,942 Posts
    • 7,655 Thanks
    00ec25
    • #6
    • 15th Apr 19, 6:57 PM
    • #6
    • 15th Apr 19, 6:57 PM
    Thanks 00ec25
    Sorry if my post is not clear. Does this help?
    I bought the house in 1981 and lived in the property. OK, for CGT purposes only, the property is to be treated as being owned from 31 March 1982.
    You will therefore need to establish its market value at that exact date in order to calculate an accurate gain
    https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg16700

    I moved out and let it from1989-2000 and then I moved back in.
    I have owned property for 38 years.
    So therefore I lived in property for 28 years and let it for approx. ten-years.
    I am living in the property now.
    Every year I do a tax form. And I used to submit letting property income. So HMRC have all the info.
    I am now going to sell my property and I will have to pay capital gains on those ten-years of letting.
    My question was do I tell HMRC I owe them capital gains or will they automatically send me the relevant information when I sell my property?

    Slithery answered the question for me. It is down to me to inform HMRC that I owe capital gains.
    I thought what with the computer age and HMRC having all my letting income details that they would inform me. not really. HMRC know you exist, know you submit a tax return, but know nothing about your property value or the fact you have sold it
    so have nothing to trigger asking you before you would ordinarily be required to submit your tax return - hence it called self assessment.
    if you fail to submit, they will eventually catch up with you as they are notified of all UK property sales, but by then you will be penalty territory as it will take then time to put 2 & 2 together. So simply don't go there



    Thank you for your interest. All info is much appreciated. I think I will hire an accountant to finalise affairs but I want to try to understand the complexities. then please see the link I give below
    I understand, I can claim solicitors fees for selling the house but that's about it. I'm on a learning curve at the moment so please excuse my nave questions.
    Originally posted by ZZaffy
    OK, as above technically your "original cost" is the 31 March 1982 value, not what you physically paid to buy the place in 1981.
    Your ownership period will be from that date, so will be less than the 38 years you actually owned it.
    Obviously the value difference between those dates may be "small", but it may be worth your while establishing the more accurate value since that will reduce your gain if the property increased in value 1981 to 1982 obviously

    you are correct in respect of the costs you can claim against the purchase and sale. The cost of getting, for example, a professional valuation at 1982 would be allowed as a deduction from the gain. See: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15260

    things you have missed
    as mentioned, it was your home so you claim
    - private residence relief
    - letting relief
    both will significantly reduce your final tax bill

    see this for an example of the calculation:
    https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2

    if you want to get an idea of HMRC's likelihood of accepting your own calculation (once you have sold it) you can ask them to review you values using a CG34 Form - you must do so at least 3 months before you finally submit your tax return
    https://www.gov.uk/government/publications/sav-post-transaction-valuation-checks-for-capital-gains-cg34
    Last edited by 00ec25; 15-04-2019 at 7:03 PM.
    • ZZaffy
    • By ZZaffy 15th Apr 19, 7:28 PM
    • 81 Posts
    • 22 Thanks
    ZZaffy
    • #7
    • 15th Apr 19, 7:28 PM
    thank you
    • #7
    • 15th Apr 19, 7:28 PM
    Thank you. Incredibly helpful. I will follow the links you supplied and refer to this post often.
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