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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Have a client that is on the verge of selling a commercial

Customer Question

Hi
Have a client that is on the verge of selling a commercial property that he has let out for the last 20 years.
he is trying to reduce his tax bill.
any allowances or suggestions you would recommend.
regards
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. He will be liable for Capital Gains Tax (CGT) on the gain made on disposal. The gain is the difference between the acquisition and net disposal price. The acquisition price in the original cost plus purchase costs plus any improvements eg installation of double glazing, central heating, air conditioning, extensions etc, but not routine maintenance which can be used to offset rental income. If you client is going out of this business altogether then he may be entitled to Entrepreneurs' Relief (ER) which limits his CGT exposure to a flat rate 10%. Failing this then he has Lettings Relief (LR) up to 40K and his Annual Exempt Amount (AEA), currently 11.1K to fall back on. If there is no entitlement to ER then the gain will be taxed at 18% or 28% or a combination of the two rates depending on the income including the gain in the tax year of sale. I do hope that your find my reply useful.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.