I only got part of your answer up to period in months, can you resend please.
Sorry I hit the wrong key, I will continue!
Total ownership period is say 600 months. Residence by you 420 + 18  (you are deemed to be resident in the last 18 months of ownership even if this is not the case). 600 - 438 = 163 so of the 50% of the gain applicable to you 180 / 600 = say 27% will be liable to CGT.
The gain is calculated from the acquisition price and the net selling price. The acquisition price is the purchase price plus costs plus any improvements eg installation of double glazing, central heating, extensions etc. The sale price is the selling price less costs of sale. Your question is silent upon these matters so on the face of it the gain to be taxed is 150K - 4K = 146K / 2 = 3K @ 27% = say 20K.
CGT is levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the year of sale, worst case scenario is a tax bill of 5.6K. You declare the gain on your self assessment tax return for the tax year in which the sale takes place.
Your question is silent as to costs on purchase and sale or any improvements so my ball park figure probably needs adjustment.
I do hope I have been able to assist you with your question.
Please accept my apologies, I have mislead you slightly by failing to draw your attention to your Annual Exempt Allowance (AEA) of 11K [11.1K, 15/16]. I also put a typo into paragraph 3 of my answer; delete '27%,' insert '28%.'
The AEA would reduce the gain to 62K with a worst case tax of 17.36K tax. Deep apologies, I hang my head in shame.
Thank you for your support.
Further to my enquiry of 27/3/15 (06:15), here is my additional info./ corrections so that you may give me a more accurate figure for my CGT liability. Thank you for your message confirming that I am entitled to a tax allowance of £11.1K (this was a question that I was going to raise in this enquiry).
The sale price of the property, after costs, was £147,019. My 50% share = £73.5K . The original purchase price + costs = £4.5K. Therefore the gain is £69K, which I presume can be reduced to £57.9 after deducting the tax allowance?
Also I carried out the following improvements:
Attached brick garage = £900 (late 60s)
Front porch = £800 (late 70s)
Rear extention = £1200 (ditto)
2 first floor rooms over garage = £4500 (earlier 80s)
Central heating installed = £1000 (late 70s)
Gas conversion = £700 (80s)
New gas boiler and rads = £1500 (90s)
I have been away for a few days, hence the delay in responding. Thanks for your reply, but I still need clarification on my CGT liability in case I get it wrong.
On 27 March you advised that the "worst case scenario is a tax bill of £5.6K" (rate of 28% but no deduction for AEA or improvement costs on the property)
On 2 April you refer to a "worst case scenario of a tax bill of say £13.2K" after taking the above into account. But no allowance has been made for the 73% of the time that the property was my premier residence (i.e 27% liability).
My share of the property was £73.5K. If I deduct £15.4 for improvement costs and £4.5 for the original purchase price, it leaves a 'gain' of £53.6K.
On the basis of your earlier calculation, my liability is 27% (438 out of 600 months residence) of £53.6K, which is £14.47K. I assume that it is at this stage that this can then be reduced by my AEA allowance of £11K. This leaves a taxable figure of £3470.
28% of £3470 gives £972. But because my annual income is only about £15K, the rate levied would probably be only %18. (less than £32010?). This would mean that I would only owe the taxman less than £1000?
If my calculations are incorrect, please advise where my figures are incorrect or where I have made wrong assumptions. A reasonably accurate figure is needed by my solicitor so that she can make allowance for CGT liabilities in her final account. I can deal with the taxman later in the year.
Sorry that my enquiries are dragging on a bit, but I hope that this will be the last time I will need to seek your assistance.
You appear to be correct in your assumptions, David.
You will owe under 1K in CGT. 14.47K - 11K = 3.47K @ 18% = 0.6246K tax due. Remember that if you exchange in the 15/16 tax year the AEA is 11.1K which will reduce your liability a tad to 0.6066K.
Thanks for your confirmation of my CGT calculations. I will not trouble you further on this matter.