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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4074
Experience:  FCCA FCMA CGMA ACIS
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My wife and I jointly own a property which has been let out

Customer Question

My wife and I jointly own a property which has been let out over the last 20 years. It is currently being sold at £119,000. Sale costs will be 2,350. Improvement costs were 2,000. purchase & costs were 46,400. My wife's total income for this year 15/16 will be 16,300 my total income will be 12,000.
What is the total tax we can each expect pay for the 2015/16 tax year.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Did you ever live in this property?
Once I have a reply I can assist you.
Customer: replied 2 years ago.

No. Only let it out

Expert:  bigduckontax replied 2 years ago.
That is a disappointment as you will not be entitled to Lettings Allowance which could have given you some 40K of relief.
You are liable for Capital Gains Tax (CGT) as follows:
119K - 2.35K - 2K - 46.4K = 66.25K at half each = 33.125K - 11.1K [Annual Exempt Amount] = 22.025 liable to CGT.
CGT is levied at 18% or 28% or a combination of the two rates depending on the individuals' income including the gain in the year of sale.
Your wife's will all be in the 18% bracket so her CGT liability will be a tad under 4K as indeed yours will be also. Simple, as the Meerkat in the TV advert would say, total bill for the pair of you just under 8K.
I do hope that I have been of assistance to you in my answer which assumes that you are both resident in the UK
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
This gain is declared on your 15/16 self assessment tax return and will not be payable until 31 January 2017.
Expert:  bigduckontax replied 2 years ago.
And your most generous bonus.