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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a pensioner with an income of approx £10,000 per year

Resolved Question:

Hi, I am a pensioner with an income of approx £10,000 per year from all sources, I am selling the family home after a divorce, and will be getting approx £80,000 from the sale. What are the tax implications for me?
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 confirm if the family home has been your main residence before sale.
Also what was the cost of it when you bought it and how long did you live in it?

Many thanks
Customer: replied 2 years ago.

Approx 35 years, bought for £8,500, moved out into rented flat 3 years ago, ex wife continued to live there till sale.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your prompt reply.

The property has been your main residence for nearly 32 years before you moved out.
Based on this information approx 29/32 years or 90% of your gain would be covered by private residence relief.

As the property was purchased before Mar 1982, the cost price would be replaced with valuation at Mar 1982. Lets assume both are the same and your gain is (80,000-8,500) £71,500.
If the property was jointly owned, then your share of the gain is £35,750.
Private residence relief (35,750 x 90%) £32,175.

The balance would be covered by gains annual allowance.
There would be no CGT payable

Even if your share was £80,000 this would be covered by private residence relief and gains allowance. There would be no CGT payable.

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.

Thank you for your answer, just to be clear , would i have to pay any tax on this ammount ?, coming to me as additional income as it is.

Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.

There would be no additional tax payable resulting from this amount.
This amount represents a capital gain and not income in the normal sense.
You would pay income tax on income and capital gains tax on a capital gain.

I hope this is helpful.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.

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