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 taxadvisor.uk Your Own Question

taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

We bought a house for £175000 in 1996 and added improvements

Resolved Question:

We bought a house for £175000 in 1996 and added improvements of £12000. In 2006 we had the house valued at £355000 before moving to another house and rented the first house out for the next 11 years. We sold it in Jan 2015 for £345000.
How do I work out the capital gain?
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 with the calculation soon. I presume the property was in joint names.

Please advise date of purchase and month in 2006 you moved out.

many thanks

Customer: replied 1 year ago.
The property was in joint names. The month we moved to our new address was June as far as I remember and it was 2005 not 2006 ( my mistake, sorry)
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply. I have assumed you lived in the property for 113 months and that the property was let for a further 115 months covering period Jan 1996 to Dec 2014 (total period covered 19 years) - property sold in Jan 2015. The property was jointly owned as you used the term we sold it in Jan 2015. Good news is that there is no CGT payable as the whole gain is covered by private residence relief and letting relief.More information on PRR is covered here (hs283)https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-reliefMy calculations are as follows: Sale of property£345,000Cost price£175,000Capital improvements£12,000Agents fees, solicitors fee and other costs - say£0Total cost price£187,000Gain on sale£158,000Period of ownership - months228Period as main residence - months113Private residence relief - months131(there is an additional relief to cover last 18 mthsof ownership (HS283 - example 9 )Potential capital gain£158,000Gain covered by private residence relief(131/228) x 158,000£90,781Gain subject to capital gains tax (158,000-90,781)£67,219Letting relief - maximum£67,219This is lower of- £40,000 per owner£80,000- Private residence relief£90,781- Gain on the part of the property that's been let£67,219Net chargeable gain after letting relief£0CGT payable- nil - 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.

It was June 1995 we moved to our new property not Jan 2006.

Could you readjust your calculation for me; I am partially sighted and made a mistake with the date.

Are you based in England as I note the time on one of your responses was 17.19 EST?

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply.

I am based in the UK and the revised calculations are

Sale of property£345,000
Cost price£175,000
Capital improvements£12,000
Agents fees, solicitors fee and other costs - say£0
Total cost price£187,000
Gain on sale£158,000
Period of ownership - months235
Period as main residence - months120
Private residence relief - months138
(there is an additional relief to cover last 18 mths
of ownership (HS283 - example 9 )
Potential capital gain£158,000
Gain covered by private residence relief
(138/235) x 158,000£92,783
Gain subject to capital gains tax (158,000-90,781)£65,217
Letting relief - maximum£65,217
This is lower of
- £40,000 per owner£80,000
- Private residence relief£92,783
- Gain on the part of the property that's been let£65,217
Net chargeable gain after letting relief£0
CGT payable- nil -
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions