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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4189
Experience:  FCCA FCMA CGMA ACIS
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I would like to know my tax liability. BACKGROUND: 1. We

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Hi. I would like to know my tax liability. BACKGROUND: 1. We have 2 properties. Purchased in 2004 and 2006. We lived in both of them. But we used the 2006 property as our main residence. The other a buy-to-let. 2.We moved to Spain 6 years ago. in 2009
3. In 2012 we briefly lived in property for 6 months. 4. We then decided to sell both properties in 2015. 5. The 2006 property was sold in November 2015. 6. The 2004 property was sold in December 2015 QUESTIONS: 1. Are we liable to UK or Spain for a. income
tax b. capital gains tax? 2. Are we entitled to private residence relief of 11,100 pounds each? I asked these question because we lived in the UK property until 2009. And every year we spend summer and/ or easter holidays in the property. 3. When do I have
to inform and pay the tax due on sale of these properties to the HMRC? 4. Which form do I have to use? 5. I did a crude calculation assuming we are entitled to private residence relief on one property and capital gains tax on the buy-to-let property. Is this
how I have to do the calculations? 1. Sale proceeds 285,000 2. Purchase price 193,000 3. Diff 92,000 Less 4. Solicitors fees (1068) 5. Estate Agents (4979.29) 6. Total 85952.71 7. Less Person allowance 11,000 PROVIDED BOTH YOU AND THE OTHER OWNER IS SELLING
8. Less Personal allowance 11,000 9. Total 63952.71 10. So we have to pay 63952.71 x 18/100 PART OF IT MAY BE AT 28% https://www.gov.uk/capital-gains-tax/work-out-your-capital-gains-tax-rate 11. Capital gains tax payable =###-##-####6. Or do I have to do
a calculation with both properties? 1. Sale proceeds1 285,000 Sale proceeds2 305,000 2. Purchase price 1 193,000 Purchase price 2 210,000 3. Diff 187,000 Less 4. Solicitors fees (1068) (1446) 5. Estate Agents (4979.29) (4758) 6. Total 174748.71 7. Less Person
allowance (11,100) 8. Less Personal allowance (11,000) 9. Total 152548.71 10. So we have to pay 152548.71x 28% 11. Capital gains tax payable = 42713.638 Kind 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. The 11.1K you quote is the Annual Exempt Amount (AEA) available against any capital gain made and nothing to do with Private Residence Relief (PRR). Before I can continue though, I need to know if you ever let the 2006 property? Once I know this I can advise you further.
Customer: replied 1 year ago.
Yes the property was let between the period 2008 - 2010.
Customer: replied 1 year ago.
Sorry Feb 2009 -Oct 2011
Expert:  bigduckontax replied 1 year ago.
You have a Capital Gains Tax (CGT) liability on both the properties, but Private Residence Relief (PRR) will apply to the 2006 property, but only for two thirds of the gain, reflecting your occupation as your sole or main domestic residence. For your buy to let property you will be liable to CGT for the whole of the gain. You will be entitled to Lettings Relief (LR) also up to 40K to offset the gain on this property. These gains are declared on your annual self assessment income tax return. You have the calculations relatively correct, bot your Annual Exempt Amount (AEA) is only received once in every tax year so selling in separate tax years could be to your advantage.
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