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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My husband and I bought a house in Feb 2000 for £132,000. We both lived in the house for 3 years and then my husband who was in the RAF was posted to Oxfordshire in Feb 2003, so we moved out of the house to live in married quarters. We decided to rent out our house and have done so ever since. Our current tenants want to buy our house and we have accepted an offer of £270,000. Back in Feb 2003 we transferred ownership of the house into my name only for tax purposes. We remained in RAF accommodation until Aug 2006, then we bought another house which is still our principle private residence. Can you tell me what (if any) capital Gains Tax we would have to pay. I am employed earning approx £18k a year and our monthly rental income is £900 a month.
Submitted: 1 year ago.
Category: Tax
Expert:  MyVirtualCPA replied 1 year ago.
Part of the gain will be tax free, but not all of it.
There's also a 40k lettings relief that results in tax free treatment for 40K
see the following on how to calculate your gain
http://www.theguardian.com/money/2014/aug/21/capital-gains-tax-on-let-property
Please let me know if you need anything additional, if not please rate positive so that I may receive credit for assisting you today
MyVirtualCPA, Accountant
Category: Tax
Satisfied Customers: 16559
Experience: CPA with Master's degree in accounting
MyVirtualCPA and 2 other Tax Specialists are ready to help you
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question
I can offer a different position on this matter along woth the full capital gain calculation
Can you advise
1) Whether any of the time with your husband in the RAF was spent posted abroad - of so please advise dates
2) Where this property is situated - as you advise that your husband was posted to Oxfordshire but do not indicate how far this is from the purchased property
3) Where the property purser in 2006 is situated - and has it been your main residence throughout the ownership (so from 2006 to date)
4) have you been declaring the rental income to HMRC
Thanks
Sam
Customer: replied 1 year ago.
Hi Sam i was happy with your reply but accidentally caught the wrong button on my iPad as i was answering your questions.
1. My husband was never posted abroad.
2. Our rental property is situated in Huntingdon so a good*****each way to his work in Oxfordshire. His job also meant that he needed to be close by the camp. We were in Oxfordshire for 2.5 years and were then posted back to Huntingdon where we went into married quarters for a year before buying our second home in Aug 2006 which has been our main home ever since.
3.Our second home is near Huntingdon about 15 miles from our rental property.
4. All income and expenditure has been declared to HMRC via our accountant. He is on holiday for 2 weeks hence my coming to you. We need to know if any capital gains tax is payable so we can decide if we need to amend the deeds on our rental property to joint names to reduce our tax liability.
I am AAT qualified but over 9 years ago and the methods for calculating Capital Gains on rental properties have changed. I do understand quite a bit about whats involved but just need it confirming.
Thank you
Wendy
Expert:  Sam replied 1 year ago.

Hi Wendy

I note that you have rated the other expert for their work - would you still like me to proceed if so I shall send an additional services request to you for more Q & A time

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam, i haven't used this site before so wasn't aware about how it worked. The other adviser didn't tell me anything i wasn't already aware of so i am not paying them anything. A really lazy answer actually! I would like to continue with you please.
Thank you
Wendy
Expert:  bigduckontax replied 1 year ago.

Hello Wendy, I'm Keith and happy to help you with your question.

SamTax seems to be busy elsewhere and your original answer appears to have been from an USA CPA!

As an ex military man (RAPC & AGC(SPS)) may I suggest the following course of action. Approach Just Answer Administration and ask for the rating you apparently inadvertently gave to be cancelled and your deposit returned also. Then you can pose the question again and, as you feel content with Sam, request that she answer the new question. She would then have 15 minutes in which to respond before your query is thrown open to all other UK tax experts.

I do hope I have shown you a way forward. Please ignore my request for a rating which will come up automatically below this advice.

Expert:  Sam replied 1 year ago.

Hi

I am not busy and am happy to proceed if you are - I have requested a refund for you,

you seem to havepessed the wrong button - or you can ask yourself link here to do this - http://ww2.justanswer.co.uk/en-gb/help/how-can-i-request-refund

Then just repost on this thread when done, and I shall answer your question, and if I am not available as soon as you respond, andd you would prefer t wait for me (as that is the purpose of requesting a preferred expert even after a 15 min time frame has lapsed!) then just state this is the case.

Thanks

Sam

Customer: replied 1 year ago.
Hi Sam,
I have requested a refund as per your instructions above and state that I am happy to proceed with you. I will repost the original question.
Regards
Wendy
Expert:  Sam replied 1 year ago.

Hi

Thanks Wendy!

Sam

Customer: replied 1 year ago.
My husband and I bought a house in Feb 2000 for £132,000. We both lived in the house for 3 years and then my husband who was in the RAF was posted to Oxfordshire in Feb 2003, so we moved out of the house to live in married quarters. We decided to rent out our house and have done so ever since. Our current tenants want to buy our house and we have accepted an offer of £270,000. Back in Feb 2003 we transferred ownership of the house into my name only for tax purposes. We remained in RAF accommodation until Aug 2006, then we bought another house which is still our principle private residence. Can you tell me what (if any) capital Gains Tax we would have to pay. I am employed earning approx £18k a year and our monthly rental income is £900 a month.
1. My husband was never posted abroad
2. Our rental property is in Huntingdon so a good 2 hour commute each way to the camp in Oxfordshire My husbands job meant he had to be on call at the base. We were in Oxfordshire for 2.5 years then posted back to Huntingdon but remained in married quarters before buying our second home which gas been our principle private residence since then.
3. All income and expenditure gas been reported to HMRC via our accountant since we started renting out the property. He is on holiday for 2 weeks and we need an answer before then. We need to know what capital gains tax we owe so we can decide to add my husband to the deeds which are currently solely in my name to take advantage of his £40k rental relief.
Thank you
Wendy
Expert:  Sam replied 1 year ago.

Hi Wendy

Thanks for your response and asking for me

Due to your husbands posting - then along with the 3 years that this was your main residence, you also could have up to 3 years - but this works on the assumption that you will return to the property, or if you cannot, then its due a geogrpahocal posting eslewehere.

You advise that you only spent 2.5 years away and then did return to Huntingdon (approx and made a further purchase in 2006 so you can only have up until the first 2.5 years as after that you failed to meet the requirements for the last 6 months to also be included.

So we have 5.5 years (approx 65 months) PPR along with the last 18 months of ownership (approx 83 months)

So owned so far for 182 months with a gain of £138,000 x 83/182 = £61418 PPR

So this leaves £76582 gain

Then you also have private lettings releif as you have declared the rental income to HMRC, which is the lesser of

1) The amount o gain on which PPR is awarded on - so £61418

2) The amount of gain left over after PPR has been applied - so £76852 OR

3) £40,000

Now at this atge if the property was in joint names - you would each have Priavte lettings releif (so 2 x £40,000) and 2 x annual exemption allowance (so £11,000 x 2)

But you advise this is in your sole name and unless you make the transfer in this tax year (before 05/04/2015) and then sell AFTER 06/04/2015 then you will not be permitted to have the benefit of this being transferred into joint names, so make sure you adhere to the dates.

Doing so will ensure that there is NO capital gain arising, as £76852 - £80,000 (private lettings relief x 2) - NIL

But as the gain has been reduced to NIL due to the private lettings releif awarded you still have to declare the position to HMRC - so do alert them to the change of ownership when it takes place (and split the remianing rental income accordingly) and 2) when the property is sold.

let me know if you have any follow up questions but it would be appreciated if you could rate me for the level of service I have provided - and thank you for your patience in coming to grips with Just Answer.

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13712
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Hi Sam
You have confirmed what I had more or less worked out for myself. Also, wouldn't we also be able to offset any expenses involved with the buying and selling of the property if we had been due to pay Capital Gains Tax?

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