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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have filled out s/a tax return after sale of flat. Selling

Resolved Question:

I have filled out s/a tax return after sale of flat. Selling price less disposal costs, less original purchase cost, less cost of improvements. There should be an annual exempt amount of 11'000 taken off but that does not appear anywhere.
Also the flat was in both mine and my husband's name so I should be able to fill out both tax returns and claim annual exempt amount on both. How?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. You need to split the figures on a 50:50 basis so that you and your husband each only disclose your respective shares of the gain in your respective tax returns. The annual exempt amount does not appear in the capital gains pages. It will be given automatically by the HMRC computer. If you are completing the returns online, the tax calculations which you can look at when you have finished will reflect the annual CGT exemption. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

So say we sold the flat for 80'000 we each would then declare 40'000 which is below the threshold for capital tax gains so we would not need to fill in the capital gains part of the tex return.

Expert:  TonyTax replied 1 year ago.
The threshold is four times the annual CGT exemption, £44,000. If the net gains for each of you are more than the annual exemption, they need to be disclosed regardless.
Customer: replied 1 year ago.

Sorry still don't quite understand. We sold the property for 83'000 and after deductions the net gain is 48'535. So I would have to split the 83'000 as 41'500 each and proceed.

Expert:  TonyTax replied 1 year ago.
The property was jointly owned. Therefore, you split all the figures (proceeds, selling costs, purchase price, buying costs, improvement costs) on a 50:50 basis and complete the boxes on the capital gains pages as appropriate. If the gross proceeds were £83,000, then you each start with £41,500, put the deductions through (50% each) and you arrive at your gain which appears to be £24,267.50 each. That is more than £11,000 and, therefore, needs to be disclosed. You could have net proceeds of £20,000 but the gains could exceed £11,000, the annual exemption, so they would need to be disclosed. If your net proceeds exceed £44,000 you need to dislcose the gains regardless of whether they exceed £11,000 or not.
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