How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13937
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

I am 90 years old this year. in 1975 I purchased some investment

Resolved Question:

I am 90 years old this year. in 1975 I purchased some investment property for £7.750 if I sold it for £200.000 what capital gains tax would I pay
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
You would need to establish the rebasing cost in 1982 of this property - either through a local estate agent OR the district valuer -
Assuming this is around £20,000 then this is deducted from the sale price of £200,000 = £180,000
You can then deduct the costs to buy (such as legal fees) and the costs to sell (such as legal fees, estate agents etc) and also the costs for any capital improvements such as new bathroom or kitchen for example.
This would then leave the gain to consider for capital gains tax (as I assume this has never been your home.main residence so will not attract and tax reliefs)
Then the figure left over (shall leave at £180,000 for the purpose of showing you how the calculation is made)is liable to capital gains tax AFTER the first £11,100 (if the sale was made after 05/04/2015)
So a gain of £168,900
If your normal annual income is in excess of £41785 then the gain is fully liable at 28% = £47292 if your annual income is less than £41785 - then some of the gain (the difference between your annual income basic rate band limit and the 20% rate band limit - can be utilised to allow the equivalence of that capital gain at 18% and any remaining gain at 28%.
For example, annual income of £31,785 from top level of basic rate band (an personal allowances) leaves £10,000 unused
So the first £10,000 of the gain would be charged at 18% and the remaining gain at 28%.
Let me know if you wish me to expand on any element of the information I have provided.
Thanks
Sam
Customer: replied 2 years ago.

Thanks very much for the info my total income including rent is £19,500 per annum so how does this affect the position?

Expert:  Sam replied 2 years ago.
Hi Brian
Thanks for your response
Then once you have taken into the account the correct value for 1982 (which helps lessen your gain) and also established the costs to sell and buy - and any major capital improvements - which establishes the right gain - then the first £11,100 is exempt with the remaining gain liable as
First £22,285 at 18% and any remaining gain at 28%
If i used the £180,000 as the guide less £11,100 exemption = £168,900
Then first £22285 x 18% = £4011.30
Remaining £146,615 x 28% = £41052.20
Total gain £45063.50
let me know if you require any further assistance - or if you could rate the level of service I have provided, it would be very much appreciated, as this ensures I am credited for my time
Thanks
Sam
Sam and 3 other Tax Specialists are ready to help you