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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am in the process of selling a property in London, I would

Resolved Question:

I am in the process of selling a property in London, I would like to know how much tax I have to pay on it.
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

It is difficult to give you precise answer without details.

Basically, if it is a second home or investment property that has never been your main residence at any point during ownership then the whole gain (selling price less cost of purchase including costs associated with buying and selling the property) would be chargeable to capital gains tax. You will claim gains annual exemption of £11,000 against the net gain and the balance will be taxed at CGT Rate of 18%, 28% or a combination of both depending on your total income in the year of sale.

I hope this is helpful and answers your question.
Customer: replied 3 years ago.

Thank you for your answer.


 


The property was bought with mortgage by my husband, who is a non UK resident, and was my residence during 2 years, after that, I moved to UAE with him and we rented the place.


Nearly two years back, (to reduce the mortgage payments) we transfer the flat and mortgage to my name, and now I am selling it.


 


The total costs of buying the property were £ 280,000 and I am selling it now for £305,000.


How much do we have to pay? Would the fact that we do not live in the UK change anything?


 


 

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

Your gain is £25,000. It was your main residence for 2 years before you moved to UAE.

Based on information provided your gain would be covered by private residence relief and letting relief AND therefore no CGT payable.

I hope this is helpful and answers your question.
Customer: replied 3 years ago.

Thank you again.


Your information is very helpful.


 


Could you tell me, which would be my next step?


 


Since I moved to UAE (4 years back) I have not submitted any tax revenue form.


I have contacted them more than one year back, they were supposed to send a form to fill, but I never received it.


The sale will be completed within two months. Should I wait for it to contact the tax office?


 

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

If you don't file a tax return, you should ask for one as this is a chargeable gain that needs reporting on your tax return albeit there will be no charge.

You should contact HMRC once the sale has taken place.

I hope this is helpful.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes

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