How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Sam Your Own Question

Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13776
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

I need help calculating a CGT figure assuming all my properties

Resolved Question:

I need help calculating a CGT figure assuming all my properties are liquidised in the 2013-14 tax year.

In general terms, what would be the effect on this liability if I staggered the sales over say a five year period for example.

I currently own 5 residential property titles

Ref / Title / Date Purchased / Use

No 8 / Freehold / 19/07/2003 / Let for entire period

No 10 / Freehold / 29/07/2003 / Let to 11/11/2012 but since then No 10 has been my main residence

No 14 / Leashold / 17/06/2002 / Let for entire period

12/14 / Freehold / 17/06/2002 / Leased for entire period

No 4 Freehold / 10/10/2013 / Private holiday home - not let


Ref / Valuation / Selling Costs / Purchase Price /Actual Purchase Costs / Gain

No 8 (F) £180,000 £5,400 £133,950 £2,198 £38,452
No 10 (F) £180,000 £5,400 £133,950 £2,198 £38,452
No 14 (L) £145,000 £4,350 £99,950 £1,859 £38,841
12/14 (F) £5,000 £150 £- £- £4,850
No 4 (F) £185,000 £5,550 £185,000 £2,913 -£8,463
--------
£112,132

I pay tax at the standard rate
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question

Could you advise your annual income - as the capital gains rates uses any unused basic rate band and I assume these are all in your sole name ?

Have you moved all aspects of your life into Number 12 and do not have a main residence elsewhere ?

And what would you sell when over the 5 year period ?

Thanks

Sam

Customer: replied 3 years ago.

Hi Sam


 


Thanks for prompt reply


 


My gross income forecast for 2013-14 is £32,346


 


It's No 10 and yes I have moved into No 10 completely and do not have a main residence elsewhere. No 4 is a holiday home.


 


I would not ask this last silly question as it depends on too many factors but I must provide some sort of general answer. Please assume I sell No 14 and 12/14 in 2013-14 year, No 8 next year, No 4 the year after and No 10 the year after that. Assume my gross income stays the same throughout.


 


Many thanks

Expert:  Sam replied 3 years ago.
Hi

Thanks for your response

I know asking what order you would sell in, is a loaded question, but I am sure you can appreciate that makes it too many variables for me to calculate also!

But its fair to say as you have an annual exemption allowance each year, which is £10,900 for 2013/2014 and will increase to £11,100 from 2014/2015 - that it would make sense to utilise as many of these over the years as possible.
However you also have one property on which a loss arises.
I shall treat the sales as having taken place Feb 2014

No 10 needs adjusting to allow you private residence relief and private lettings relief so has been owned for 128 months and you have lived in it for 16 months
Gain £38,542 x 16/128 = £4,818 exemption for private residence relief
This leaves £33,724 to consider
Then private lettings relief which is the lesser of
1) The amount of gain on which private residence relief is due - so £4,818
20 The amount of gain left over after private residence relief has been applied - so £33,724 OR
3) £40,000

so as the lesser is 1) the amount of gain on which private residence relief is due £4818 - this is deducted from the remaining gain of £33,724

So a final gain of £28,906
So we are left with

No 8 (F) £180,000 £5,400 £133,950 £2,198 £38,452
No 10 (F) £180,000 £5,400 £133,950 £2,198 £38,452 reduced to £28,906
No 14 (L) £145,000 £4,350 £99,950 £1,859 £38,841
12/14 (F) £5,000 £150 £- £- £4,850
No 4 (F) £185,000 £5,550 £185,000 £2,913 -£8,463
--------
So a total gain position of £102,586
Less annual exemption allowance £10,900
This leaves £91,686 liable to tax.

AS your annual income is £32,346 this means you have unused basic rate band of £10,129 (£42,475 - £32,346)
So of the £91,686 the first £10,129 x 18% = £1823.22
The remaining gain of £81,557 x 28% £22,835.96
Total tax £24,659.18

Then if you sell
I sell No 14 and 12/14 in 2013-14 year
Total gain £43,691
Less exemption £10,900
Chargeable gain £32,791
The first £10,129 x 18% = £1823.22
The remaining £22,662 x 28% = £6345.36
Total bill £8168.58

2014/2015 No 8 has a gain of £38,452
Less annual exemption £11,100
Leaves £27,352
First £10,129 at 18% = £1823.22
Remaining £17,223 x 28% = £4822.44
Total tax £6645.66

2015/2016
Revised gains with tax reliefs recalculated (assume sale Feb 2016)
To allow you private residence relief and private lettings relief so has been owned for 152 months and you have lived in it for 40 months
Gain (assuming so increase in value !) £38,542 x 40/152 = £10,143 exemption for private residence relief
This leaves £28,399 to consider
Then private lettings relief which is the lesser of
1) The amount of gain on which private residence relief is due - so £10,143
20 The amount of gain left over after private residence relief has been applied - so £28,399 OR
3) £40,000

so as the lesser is 1) the amount of gain on which private residence relief is due £10,143 - this is deducted from the remaining gain of £28,399

So a final gain of £18,256
Then the annual exemption of £11,100
Gain chargeable to tax £7156 x 18% = £1288.08

Obviously this does not utilise the loss on No 8 - but at this stage even without the loss the total gains from selling over a few years amounts to £16,102.32

This is a saving of £8556.86!

Thanks
Sam





Sam, Accountant
Category: Tax
Satisfied Customers: 13776
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions