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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Purchased property in 1991, moved to new property in 2009,

Resolved Question:

Purchased property in 1991, moved to new property in 2009, daughter lived in original property years and paid rent which was declared. Sold this year. living of capital, neither husband or I pay tax. we are aware we will have no cap gains to pay on the years it was our main residence, however will have it to pay on last 6. As we had no idea the move would take place when refurbishing original home, approx 25k have not kept any receipts. would it be possible to claim anything.Does the fact that we do not use our tax free allownces alter the amount we will have to pay.
Thank you
Jane M
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
and welcome to the site. Thank you question.

please advise
profit made on sale - (sales proceeds less cost of purchase)
Month property purchased in 1991
Month of moving out in 2009
Month of sale

Once I have the above information, I will do some calculations .

Many thanks
Customer: replied 2 years ago.

bought Nov 1991 75k, purchase cost £1750 plus stamp duty

sold Nov 2015 £268500, costs £4000 Profit £193500

Moved Feb 2009

Thank you

Expert:  taxadvisor.uk replied 2 years ago.
Jane, thank you reply.

I will revert to you shortly.

Many thanks
Expert:  taxadvisor.uk replied 2 years ago.

Jane, thank you patience.

I have good news . There is no capital gains tax payable on the gain made as the whole gain is covered by:
- principal private residence relief and
- letting relief.

This is good news even without taking into account unreceipted improvement costs.

Here are my calculations.

Sale of property£268,500
Cost price£75,000
Capital improvements£0
Agents fees, solicitors fee and other costs - say£5,750
Total cost price£80,750
Potential gain£187,750
Period of ownership - months277
Period as main residence - months226
Private residence relief - months226
Potential capital gain£187,750
Gain covered by private residence relief
(226/277) x 187,750£153,182
Gain subject to capital gains tax (187,750-153,182)£34,568
Letting relief - maximum£34,568
This is lower of
£40,000 per owner£80,000
Private residence relief£153,182
Gain on the part of the property that's been let£34,568
Net chargeable gain after letting relief£0


More information on private residence relief can be found here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323679/hs283.pdf

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.

Many thanks.

More than excellent service.

What a smile you have put on our faces.

Regards

JaneCool

Expert:  taxadvisor.uk replied 2 years ago.

Jane, its my pleasure....

Thank you kind words.

I am pleased ..

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

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 2 years ago.
I thank you my answer.

Best wishes.

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