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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I'd like you to calculate the capital gains tax I owe on a

Resolved Question:

I'd like you to calculate the capital gains tax I owe on a property if I decide to sell it in the summer.
I brought the property in 2003, lived in the property from 2003-2005 and rented it out sporadically since then.
I don't keep utility bills so the only way I could prove I lived there would be though council tax coming out of my bank account.
The property is just in my name (I'm single). The property will be put on the market for 250K, the mortgage is 175k + estate agents and conveyancing at 5K so would be grateful if you could work it out on a figure of £70K gain.
Thank you
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you with this.
What current level of tax payer are you if any?
Customer: replied 2 years ago.

Hi Alex, I am a basic rate tax payer (24K pa).

Many thanks

Tamsin

Expert:  Ash replied 2 years ago.
Thanks Tasmin. Assuming £70,000 gain the first £11,100 tax free so in this case it would be £59,900 taxable. The rate you pay is either 18% for a Basic rate tax payer or 28% for a higher rate tax payer.
The first £31,785 of your income is at the basic rate, above this will be higher rate.
If this amount is less than the basic Income Tax band (£31,785 for the 2015 to 2016 tax year) you’ll pay 18% Capital Gains Tax. You’ll pay 28% on any amount above this.
In your case assuming £70,000 gain it will be less the £59,900 taxable then 18% on the next £7785 (£31,785 allowance less £24,000 income) which is £1,401.30. Then 28% on the balance of £7,872.20 (£28,115 which is the amount of gain above £31,785.
So your gain will be £1,401.30 plus the £7,872.20 which is £9273.50
Can I clarify anything for you?
Alex
Customer: replied 2 years ago.

Thanks Alex, I was following you up to paragraph 4...

I earn 24k so why is it not all calculated at 18%? Im not a higher rate tax payer.

Regards,

Tamsin

Expert:  Ash replied 2 years ago.
Indeed. It's the difference between £24k your income and the £31,875 basic rate band.
That amount you have 18% and anything which takes you over this band is at the higher rate.
It's not the whole amount as your gain and income takes you over the £31,875
Does that clarify?
Alex
Customer: replied 2 years ago.

Ok Alex, thank you for clarifying.

Enjoy the rest of your week end

Regards,

Tamsin

Expert:  Ash replied 2 years ago.
Happy to help. Have a great bank holiday too.
If this answers your question might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.
If you need more help please click reply.
Alex
Ash and 2 other Law Specialists are ready to help you
Expert:  Ash replied 2 years ago.
Hi

I am just following up to see if there is anything else I can help with?

If this answers your question might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.

If you need more help please click reply.

Alex