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Michael, thank you for your reply..The property has been let for 25 years (300 months). Say you own the property for a total of 35 years (420 months).Your private residence relief would be for a period of (120+18)=138 months out of 420 months and the rest of the period falls within chargeable gain.Say your total gain is £100k.
Gain covered by private residence relief138/420x100,000 = £32,857
Gain subject to CGT (100,000-32,857) = £67,143
Letting relief - max £40,000
Chargeable gain (67,143-40,000) = £27,143
Gains allowance = say £11,000
CGT payable on (27,143-11,000) = £16,143
If the property is jointly owned with your wife then maximum letting relief would be (40,000x2) = £80,000 and will cover gain after PRR resulting in no chargeable gain.
I hope this is helpful
The first sentence should have read "You may have to pay some CGT on this property depending on total capital gain as you would be able to claim" - apologies for typing error
I notice you have viewed my clarification toyour question on possible CGT liabilty arising from sale of a property (JACUSTOMER-m3oejpp7- Last Viewed on 03/07/2014 at 15:59).
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