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Ash
Ash, Solicitor
Category: Law
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Experience:  Solicitor with 5+ years experience
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This question is about the valuation basis for capital gains

Resolved Question:

This question is about the valuation basis for capital gains tax on a house that has now become a second property. Bakcground: my wife bought her house in SW19 for 100k in 1994. She has lived in it since then. We married in 1998 but I continued to have my main base in Berlin. In early 2014 we sold the house I inherited from my mother and with it bought for 1 million a house in SE19 2XB. Our intention has been - still is - to sell the house in SW19 (worth about 900k) but have been thwarted due to a serious noise problem from a very nearby Sainsburys Supermarket. If we cannot solve this problem very quickly, we ay be obliged to rent out the house in SW19 in the hope of selling it later.
I understand that we are exempt from CGT on my wife's former home for 18 months (previously 3 years), but thereafter would be liable to CGT if it has meanwhile been renmted.
My question: what is the valuation date for the measurement of CGT. For example. SW19 house sells for 950k in 2016 after being rented for 2 years. Is the Capital Gain the rise in value since 2014 when we ceased to live in the house (gain of 50k) or the rise in value since it was bought in 1994 (gain of 840k)?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

The capital gain would be from date of purchase.

Alex Watts :

Therefore it would be selling price, less purchase price = gain

Alex Watts :

Less the tax free gain allowance in a year

Alex Watts :

It makes no difference really how long you have owned it for - the gain is selling price less purchase price

Alex Watts :

That is the gain

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

1. Surprising - will will see that the problem you answered before about Sainsburys has not gone away.

Alex Watts :

1. Yes I am sorry about that.

Customer:

2. I thought I had signed up with justanswer to a free trial for seven days, which has not actually run out

Alex Watts :

Ok - any questions non question related you need to speak with customer services.

Alex Watts :

I dont have access and can only see questions - nothing else

Customer:

how di I find them? and you will act for me if they refuse to honour the free offer (smiley)?

Alex Watts :

If they do not honour the offer the account will close together with your questions

Alex Watts : ***@******.***
Alex Watts :

Maybe you should contact customer services first to clarify the position

Customer:

cannot find a link to customer services

Alex Watts :

You can email***@******.***

Alex Watts :

They can assist you.

Customer:

thanks, ***** ***** do. i note that i am paying this time for high urgency and high details - even though i clicked (or thought i had) on medium in each category.

Alex Watts :

Ok - I can't see any of that, I only have access to the question as an expert

Alex Watts :

Can I help with anything else today?

Alex Watts :

If not might I invite you to rate my answer today

Alex Watts :

If the system wont let you please do say

Alex Watts :

If you need further help please click reply

Customer:

i am trying first to sort out why I am being asked to pay for this second use of your expertise despite having signed up for a 7-day free trial. i have emailed [email protected]

Alex Watts :

Ok - sure. If you need more help from me at any point come back to me.

Alex Watts :

.

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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