The value of the property is £155000-00, it has only recently been left me, this year. The property is not in joint names. I would like to know how much capital gains tax I would pay if I sold it at that price and I would like to know how much capital gains tax I would pay if I sold it at the higher price of £190000-00, bearing in mind that I would have to spend £20000-00 in order to get the higher price.
Steve, thank you for your reply.If you were to sell the property as is, there appears to be no increase in value and therefore no gain and no capital gains tax payable.if you were to spend £20,000 on improvements and then sell it for say £190,000 then your gain is £15,000. You would claim gains allowance of £11,100 (current tax year) and the balance of £3,900 would be chargeable to CGT at 18%, 28% or a combination of two, depending on your total taxable income in the year of sale. As your income is in the region of £30,000, CGT rate of 18% applicable.
CGT payable £702 (a very good return on £20,000 of investment).
I hope this is helpful and answers your question.
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Does it make a difference that the house is empty, that is, I live somewhere else, I thought that capital gains tax would apply if I sold a house that was not my main residence.