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bigduckontax, Accountant
Category: Tax
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Capital gains tax

Customer Question

Capital gains tax
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith one of the experts on Just Answer and pleased to be able to help you with your question. Please be so kind as to give me more precise information so that I can assist you.
Customer: replied 1 year ago.

Hi Keith

What exactly do you need?

Expert:  bigduckontax replied 1 year ago.
Well, I need to know what transaction do you think makes you liable to Capital Gains Tax (CGT).
Customer: replied 1 year ago.

I am thinking of selling the Betting Shop or buy my brother Share. Is the value of the property the main aspect when calculating CGT or is the value of the Rental income the main piece to calculate

Expert:  bigduckontax replied 1 year ago.
Buying your brother's share does not expose you to CGT at that transaction. CGT is normally imposed on sales. If you sell your betting shop then you could be liable to CGT on the gain made. The gain is calculated using an acquisition and a selling price and is the difference between the two. Acquisition price is the purchase price plus costs of purchase including stamp selling plus improvements eg installation of double glazing, central heating, extensions etc but not routine maintenance which is allowable against Income Tax. The selling price is the net sum received ie after deducting selling costs like estate agents', solicitors' fees and advertising. Take one from the other to calculate the gain which is taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. You have an Annual Exempt Amount of 11.1K to offset this and you may be entitled to Entrepreneurs' Relief which reduces the rate of tax to a flat 10%. If you are reinvesting in a similar business you can have Rollover Relief, but this merely postpones the CGT to some future indeterminate future date. I do hope that I have shed some light on your position with this quick canter through the basics of CGT on property.
Expert:  bigduckontax replied 1 year ago.
Buying your brother's share does not expose you to CGT at that transaction. CGT is normally imposed on sales. If you sell your betting shop then you could be liable to CGT on the gain made. The gain is calculated using an acquisition and a selling price and is the difference between the two. Acquisition price is the purchase price plus costs of purchase including stamp selling plus improvements eg installation of double glazing, central heating, extensions etc but not routine maintenance which is allowable against Income Tax. The selling price is the net sum received ie after deducting selling costs like estate agents', solicitors' fees and advertising. Take one from the other to calculate the gain which is taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. You have an Annual Exempt Amount of 11.1K to offset this and you may be entitled to Entrepreneurs' Relief which reduces the rate of tax to a flat 10%. If you are reinvesting in a similar business you can have Rollover Relief, but this merely postpones the CGT to some future indeterminate future date. I do hope that I have shed some light on your position with this quick canter through the basics of CGT on property.
Customer: replied 1 year ago.

Thank you for this detailed answer! I think things are a little more clear now!

Expert:  bigduckontax replied 1 year ago.
Delighted to be of assistance. Please be so kind as to rate me before you leave the Just Answer site.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3612
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 1 year ago.
Thank you for your excellent support.

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