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Alex J.
Alex J., Solicitor
Category: Property Law
Satisfied Customers: 3665
Experience:  Two years conveyancing experience.
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If we sell one house what are the capital gains tax rules

Resolved Question:

If we sell one house what are the capital gains tax rules
Submitted: 3 years ago.
Category: Property Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is XXXXX XXXXX I will assist you.

If the home is your main residence then you may be entitled to relief on any capital gains tax under the Private Residence Relief.

You must fulfill two criteria to claim this -
(i) it's been your only home or main residence;
(ii) you have used it as your home and nothing else.

Can I be of any further assistance or would you like to discuss this further?

Kind regards

AJ
Customer: replied 3 years ago.


one home is main residence. the other is not. It has not been let. What tax is to be paid if I sell the house which is not my main reidence

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

Are you currently a higher rate tax payer?

Kind regards

AJ
Customer: replied 3 years ago.


You are not answering my question.


 


What is the time after my marriage when capital gains kicks in if I sell a house which is not my main residence and is it based on the original price of the house or the date when we were married

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

I am afraid I cannot do the calculation without knowing if you are a higher rate tax payer.

Essentially the calculation is your sale price minus acquisition cost. You can then deduct from this figure the cost of any improvements to the property. You can then deduct the value of your annual tax free allowance which is £10,600.

This will leave you with the taxable figure and if you are a higher rate tax payer the rate is 28%.

The timing of when a property ceases to be your main residence is when in the opinion of HMRC you fail to fulfill the two criteria I have listed above. There is no hard and fast rule for that it is really whether HMRC decide to investigate the issue and you cannot prove you were using the property as your residence.

Kind regards

AJ

Customer: replied 3 years ago.


Is acquisition cost the original price of the property which was purchased over 30 years ago

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

Yes that is correct, that is the acquisition cost. The only issue would be if you have remortgaged the property over time and drawn the equity out of it. This is because you still owe your lender this money but cannot offset against your capital gain liability.

Kind regards

AJ
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