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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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Capital gains summary

Resolved Question:

Capital gains summary
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.
Can you give me some information about the type of asset disposals you need to do calculations for please.
Customer: replied 1 year ago.
We are currently working abroad and have been since Feb 2009
In October 2014 we sold and then bought a new home and went mortgage free in the process. I have just had my self assessment returned saying they can not accept it as I have to complete the Capital gains Summary however having tried to decipher the instructions I am lost to the meaning of election and what is a gain and loss as well as what I can claim.
We purchased the property in 1999 for 76,000 and during the period of ownership spent approximately 44,000 improving the property (2 x renovation and build projects)
We sold the property for 249,775.00
Fees for sale = 17,721.00
To go mortgage free we had to pay off the mortgage balance of 28,618.00 which was done by two payments one earlier in the year and another at the time of purchasing our new home which cost 225,000.00
Of the 15 years ownership we spent 10 years in the property and then let it for 4 years, the final year we did not let it, we had someone house sitting. We had 4 years of bad tenants with the occasion to go to court to remove non paying tenant.
I have completed the self assessment each year and completed the UKP section due to letting the property however we never took enough rent to pay the Mortgage, 2014/2015 tax year is the first year we did not claim the property incomeBest regards
Ron
00974 55839115
Customer: replied 1 year ago.
Hi, I forgot to ad that I do not pay UK tax and additionally we are currently paying council tax on our new home
RGDSRon
Expert:  TonyTax replied 1 year ago.
Thanks.
Can you let me know the month in 1999 you bought the property, the month and year you moved out, the month and year it was first let and the month and year the letting ended.
Customer: replied 1 year ago.
Hi,
we moved into the property in August 1999
The sale completed July 2014
The purchase completion of the new property dragged on until October 2015RGDs
Ron
Expert:  TonyTax replied 1 year ago.
Thanks. Leave this with me while I do some calculations and draft my answer.
Customer: replied 1 year ago.
Thanks Tony, if really needed I will do the live call
RGDS
Ron
Expert:  TonyTax replied 1 year ago.
I don't want to put you to needless expense so let me do the calculations and if you would still like a call, then you can let me know.
TonyTax and other Tax Specialists are ready to help you
Expert:  TonyTax replied 1 year ago.
Shall I do the calculations first and then call you?
Customer: replied 1 year ago.
Tony think phone is in the car will go and get it
Expert:  TonyTax replied 1 year ago.
OK.
Customer: replied 1 year ago.
Have the phone
Expert:  TonyTax replied 1 year ago.
OK. Give me a couple of minutes to finish my calculations and i will call you.
Expert:  TonyTax replied 1 year ago.
I'll revise my calculations and post them here with the entries for the SA108 pages which are academic since you were non-UK resident when the property was sold and the gain is exempt from CGT in any event.
Customer: replied 1 year ago.
Sorry the phone cut off, to finish what I was saying about the penalties, tax office person said se would note on the record that I had called stating facts about delay, but I would have to appeal any penalties levied.RGDSRon
Expert:  TonyTax replied 1 year ago.
An appeal should work as there is no tax due and HMRC have accepted all my recent appeals for nee clients where no tax is due even though they don't have to.
Expert:  TonyTax replied 1 year ago.
Hi again. You made a gain of £112,054 (£249,775 - £76,000 - £44,000 - £17,721). That's £56,027 for each of yourself and your wife. You owned the property for 180 months of which you lived in it for 120, let it for 48 and it was occupied by a house sitter for 12. The following figures apply to each of you individually: The gain for the period the property was your main home is exempt from CGT as is the gain for the last 18 months of ownership. That accounts for £42,954 (£56,027 / 180 months x 138 months). The remaining gain of £13,073 is that part of the letting period gain which is not covered by the last 18 months of ownership (£56,027 / 180 months x 42 months). As the property was both your main home and it was let you are entitled to letting relief which is the lesser of:1 £40,000,2 the sum of the main residence period gain and the gain for the last 18 months of ownership of the property which is £42,954 and3 the letting period gain of £13,073. Letting relief of £13,073 reduces the remaining gain of £13,073 to £0 so there will be no taxable gain. As you appear to have been non-UK resident in 2014/15, then any gains you made in that tax year will have been exempt from CGT in any event. However, as HMRC have asked you to complete the SA108 pages, here are the entries: Page CG1 Box 3 £0 Page CG2 Box 30 1, Box 31 £124,888, Box 32, £68,861, Box 33 £0, Box 35 LET (see page CGN3 here), Box 37 Total period of ownership 180 months, Main residence for first 120 months, let for next 48 months, house sitter for last 12 months. Main residence relief £42,954 (£56,027 / 180 months x 138 months). Letting relief £13,073 (£56,027 / 180 months x 42 months). I was non-UK resident in 2014/15 so the gain is exempt from CGT in any event. Take a look at HS283 for more information on the main residence and CGT. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thank you Tony.
I have cut and paste info into a word document for further reading.
I take it I only record in box 37 what you have written to be put in that box and not any of the preluding background information on the calculations.Am I able to keep your contact on my for any further work I may have or do you only work through the Just Answer site.I have at present until next September here unless they extend my contract for another year, in which case it will be a year next September before we return (full time) .
Best Regards
Ron
Expert:  TonyTax replied 1 year ago.
Re box 37: Correct.
You can return to this question whenever you like or ask another question on a different tax topic and ask for me. I'm not allowed to take on clients privately through this site I'm afraid.
Customer: replied 1 year ago.
Great and thanks again, I am off o bed, we are 3 hours ahead and I have to be up at 5amBest Regards
Ron
Expert:  TonyTax replied 1 year ago.
Sleep well.

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