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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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CGT Question Would I pay CGT if I sold my apartment,

Resolved Question:

CGT Question

Would I pay CGT if I sold my apartment, details as follows:
My only residence
Studio flat
Live and work there
Studio room 4.5m x 3.5m, lobby, bathroom and kitchen
No part of the flat is used exclusively
I'm a designer and architect and work at the laptop at a desk or in chair etc
Is it reasonable to claim half the expenses of running the flat as business expenses and if I do am I at risk of paying CGT on a portion of the flat?
Thank you
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

my name is ***** ***** I will help you with this.

Alex Watts :

No, as this would be your primary residence you would not have to pay CGT

Alex Watts :

I assume you dont pay business rates but Council Tax.

Alex Watts :

So its classed as a dwelling and you would not be liable

Alex Watts :

Taxable allowances and expenses are different from CGT

Alex Watts :

Can I clarify anything about this today please?

Customer:

Alex , thanks advice. The HMRC site does say that if part of a dwelling is used exclusively purposes then on that portion one is liable . So my question is knowing the size of the flat and the way I use it could the HMRC still claim CGT? Also I'm keen to know your view as to the proportion of 50% of the costs of running the flat claimed against tax business. I'm about to send in my return online tonight. Thanks

Customer:

https://www.gov.uk/tax-relief-selling-home

Customer:

Alex, I need to submit my tax forms in 15 minutes. I don't believe you have quite answered the specifics of my question as yet. Thanks

Alex Watts :

The answer is no. You use it (like many people do) as a home office

Alex Watts :

This is not used exclusive and thereofore not liable

Alex Watts :

Does that help?

Alex Watts :

You can claim a portion of the expenses as buisiness

Alex Watts :

when you work out the sq meter of the property, then divide that by the portion of your home office, that is what you can claim expenses against.

Alex Watts :

So if it works out to say 20%, then you can claim 20% of interest payments on mortgage, heating, electric etc

Alex Watts :

But not more than that.

Alex Watts :

Does that help?

Customer:

Given the small size of the flat I effectively use the whole flat all the facilities are used and living so I will claim 40%. The studio room is only 14 feet x 11 feet. Is this unreasonable?

Alex Watts :

Yes but it is a home office. I think 40% and you are asking investigation which you want to avoid

Alex Watts :

I think anything more than 15-20% and you would be pushing it

Alex Watts :

Does that help?

Customer:

Yes, thanks detailed advice. That is your considered view and I should not push it. That's what I wanted. I think that's all I need. Thanks again. Richard

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