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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 selling my house which I lived in years and have

Resolved Question:

I am selling my house which I lived in for 6 years and have rented out for 5 years. The profit I made on the home is £230,000 GBP (bought it in 2004 for £260,000 and selling it for £490,000). I guess I'm going to hammered for CGT, but have no idea how much. Could you advise please ?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.


Please leave it with me and I will revert to you with some calculations.

Many thanks
Customer: replied 1 year ago.

thank you very much, I await your calculations , Many thanks, Mike

Expert:  taxadvisor.uk replied 1 year ago.
Mike, please advise if the property is in your sole name or is it in joint names

Many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Mike, thank you for your patience.

My calculations assume the property is in sole name...

CGT calculations
Sale of property £490,000
Cost price £260,000
Capital improvements £0
Agents fees, solicitors fee and other costs - say £0
Total cost price £260,000
Potential gain £230,000
Period of ownership - months 132
Period as main residence - months 72
Private residence relief - months 90
Potential capital gain £230,000
Gain covered by private residence relief
(90/132) x 230,000 £156,818
Gain subject to capital gains tax (230,000-156,818) £73,182
Letting relief - maximum £40,000
This is lower of
- £40,000 per owner £40,000
- Private residence relief £156,818
- Gain on the part of the property that's been let £73,182
Net chargeable gain after letting relief £33,182
Gains allowance £11,100
Gain chargeable to CGT £22,082
CGT - worst scenario at 28%
£6,183


You are entitled to private residence relief and letting relief (letting relief available as the property was your main residence at some point over the period of ownership).

Your chargeable gain is £22,082. This would attract CGT at 18%, 28% or a combination of two depending on your total taxable income (including the chargeable gain) in the year

If the property is in joint names then there is 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 1 year ago.

excellent, thank you so much

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your kind words.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes

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