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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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What would be the capital gains tax payable on an apartment

Resolved Question:

What would be the capital gains tax payable on an apartment if sold now for 390K .the apartment was bought in 2002 for 200K and used ,for a number of years as the family home .For the last 8 years it has been a rental property
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Please clarify for me...
What do you mean by ... for a number of years as a family home?
Was it your property and main residence or was it occupied by extended family?

If it was lived in by you and your family as your main residence then advise number of years it was occupied as main residence.

Many thanks
Customer: replied 3 years ago.

I am actually enquiring on behalf of my daughter who is resident in the UK


She and her husband bought the apartment in 2002 and lived in it until 2005 when they bought another residence and rented the apartment


 


 

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply...

I will revert to you shortly with calculations

many thanks
Expert:  taxadvisor.uk replied 3 years ago.

Here are CGT calculations ..

As the property was jointly owned, each owner would be able to claim letting relief.
It is assumed the property is sold before 5 Apr 2014 as there is a change in additional relief available.. it will be restricted to final 18 months of ownership as opposed to 36 months up to 5 Apr 2014.

CGT calculations

Sale proceeds

390,000

Cost price

200,000

Potential capital gain

190,000

Period covered as main residence

48

(2002 - 2005)

Period unoccupied

0

Period covered as let property

98

(2006 -Feb 2014)

Total period of ownership

146

(2002 - Feb 2014)

Final 36 months relief

36

Private residence relief

109,315

Gain subject to CGT

80,685

Gain per owner

40,342

Maximum letting relief available - lower of

Fixed amount set by HMRC per owner £40,000

40,000

Private residence relief

54,658

Gain on the part of the property that's been let

40,342

Letting relief

40,000

Gains chargeable to CGT

342

Gains annual allowance (£10,900 per owner)

10,900

There is no CGT payable as chargeable gain after private residence relief and letting relief will be covered by gains annual allowance as shown above.

I hope this is helpful and answers your question.


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Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes

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