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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Property bought 219k in 2010, property was then lived

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Property bought 219k in 2010, property was then lived in until 30th April 2012. Property rented out from April 2012 until March 2014. Property then occupied back by the owner and now planning on selling in March 2015 at approx 450k GBP.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

and welcome to the site. Thank you question.

Please advise if the property is jointly owned?

Also advise month of purchase in 2010.

many thanks

Customer: replied 2 years ago.

Property is owned solely by myself and bought in June 2010.

Expert:  taxadvisor.uk replied 2 years ago.
Thank you reply...

Capital gains calculations are as follows:

Sale of property £450,000
Cost price £219,000
Capital improvements £0
Agents fees, solicitors fee and other costs - say £0
Total cost price £219,000
Potential gain £231,000
Period of ownership - months 58
Period as main residence - months 34
Private residence relief - months 34
Potential capital gain £231,000
Gain covered by private residence relief
(34/58) x 231,000 £135,414
Gain subject to capital gains tax (231,000-135,414) £95,586
Letting relief - maximum £40,000
This is lower of
£40,000 £40,000
Private residence relief £135,414
Gain on the part of the property that's been let £95,586
Net chargeable gain after letting relief £55,586
Gains allowance £11,000
Gain chargeable to CGT £44,586


Your chargable gain of £44,586 would be chargeable at 18%, 28% or a combination of both based on your total taxble income in the year of sale.
Maximum CGT would be (44,586x28%) £12,484

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

I will have approx 7k of solictor and estate agent fees also a further 2,578.80 of a new boiler I put in last year (is that covered under capital improvements?)

thanks,

Justin

Expert:  taxadvisor.uk replied 2 years ago.

Justin, thanks reply...

Both costs would be allowable from the gain before any reliefs. As would agent's fee when you sell the property.

Here are revised calculations ....

Sale of property£450,000
Cost price£219,000
Capital improvements £0
Agents fees, solicitors fee and other costs - say£9,578
Total cost price£228,578
Potential gain£221,422
Period of ownership - months58
Period as main residence - months34
Private residence relief - months34
Potential capital gain£221,422
Gain covered by private residence relief
(34/58) x 221,422£129,799
Gain subject to capital gains tax (221,422-129,799)£91,623
Letting relief - maximum£40,000
This is lower of
£40,000£40,000
Private residence relief£129,799
Gain on the part of the property that's been let£91,623
Net chargeable gain after letting relief£51,623
Gains allowance£11,000
Gain chargeable to CGT£40,623



I hope this is helpful.

Customer: replied 2 years ago.

Allowable from the gain ie: can be deducted?

Very helpful and thank you quick turnaround.

Expert:  taxadvisor.uk replied 2 years ago.

These costs can be deducted.

Customer: replied 2 years ago.

That is superb, one quick last question, 1) is there a spreadsheet I could have a copy of? 2) The flat was also empty during about a month can that be added?

thanks,

Expert:  taxadvisor.uk replied 2 years ago.
Thank you fo ryour reply.

When the flat was empty, that period is already covered in the calculation as the maximum letting relief you would get is £40,000.

The spreadsheet is my working model. You can make one from what I have posted to you.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.

Justin

I notice you have viewed my latest answer to your question about capital gains tax (JACUSTOMER-lh1798p0- Last Viewed on 1/19/2015 at 10:53 AM).

Just checking to see if you have any issues relating to your question that I may not have addressed. Please let me know if I can be of further assistance.

Expert:  taxadvisor.uk replied 2 years ago.
I thank you my answer.

Best wishes.

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