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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4198
Experience:  FCCA FCMA CGMA ACIS
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Purpose of Capital Gains Tax, if a let residential

Customer Question

For the purpose of Capital Gains Tax, if a let residential property with a severed ownership (tenants in common) is sold and one of the owners has less than 50% beneficial ownership, can he or she claim relief of 10% of the chargeable gains?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I am concerned with your mention of a 10% tax rate. GCT is levied at 18% or 28% or a combination of the two rates depending on the individuals' income including the gain in the tax year the gain is realised. There is a 10% rate, Entrepreneurs' Relief, but this would only apply to a property which was used for furnished holiday lettings. The owner with a smaller proportion of the property would be taxed on the appropriate proportion of the gain [ie if it were a 60/40 split then it would be 40%]. They would be entitled to their Annual Exempt Amount of 11.1K to offset the gain and be entitled to Lettings Relief up to 40K also. I do hope that my reply has been of assistance.
Customer: replied 2 years ago.
Hi, I was not referring to CG tax rates, but possibly claiming relief/a percentage reduction of the CHARGEABLE GAINS on account of the fact that they had arisen on disposal of a MINORITY, SEVERED BENEFICIAL INTEREST.There is a percentage relief for severed interest on valuation for IHT and I am wondering if whether anyone has any experience of successfully claiming the same with CGT?
Expert:  bigduckontax replied 2 years ago.
Simply no, for no such relief is available. If there is a gain then your proportion will be taxed as I explained.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.