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taxadvisor.uk
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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I own a buy to let property, purchased in April 2003 as my

Resolved Question:

I own a buy to let property, purchased in April 2003 as my own home, but rented out from December 2005 until present day, purchased for £145,995 and expected to get £200,000 in current market, if I sold property would I be liable to capital gains tax ? I have not had any other capital gains but have this year sold a flat inherited from my mother ( shared between my brother and myself) no tax was payable on this sale ( I benefited 72,000).
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Please leave it with me and I would carry out CGT calculation for you.

Many thanks
Customer: replied 2 years ago.
I assume as a basic rate tax payer ( but self employed) capitals gains tax is the only tax that I might be liable for, I am very low income (approx £17,000 per annum that includes the approx £5000 in tax I earn from this property ) thanks
Expert:  taxadvisor.uk replied 2 years ago.
Julie, thank you for additional information.

Gain from sale of property would only give rise to CGT.
Please confirm your total income from all sources is around £17k (self employment, rental income, etc )

I will revert to you shortly.

Many thanks
Customer: replied 2 years ago.
As I self employed shop keeper I earned approx £12,000 last year , the income from the house is £800 a month but this is offset by a mortgage of £250 ( interest only a month ) and insurances ( £40 a month ) plus other upkeep issues , therefore I estimate nett earnings from rented house to be approx £5820 per year ( £9600 gross).
Expert:  taxadvisor.uk replied 2 years ago.

Julie, thank you for your patience.

Here are my CGT calculations...

Sale of property£200,000
Cost price£145,995
Capital improvements£0
Agents fees, solicitors fee and other costs - say£0
Total cost price£145,995
Potential gain£54,005
Period of ownership - months144
Period as main residence - months32
Private residence relief - months50
Potential capital gain£54,005
Gain covered by private residence relief
(50/144) x 54,005£18,752
Gain subject to capital gains tax (54,005-18,752)£35,253
Letting relief - maximum£18,752
Net chargeable gain after letting relief£16,502
Gains allowance£11,000
Gain chargeable to CGT£5,502


CGT payable (5,502 x 18%) = £990

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.

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 for accepting my answer.

Best wishes.

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