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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4973
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am thinking of selling my second property to pay off the

Customer Question

I am thinking of selling my second property to pay off the mortgage on my main home due to ill health. How much CGT will we have to pay and how can we reduce it ?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question. If you have never lived in this property as your main residence during the period of ownership, then the whole gain would be chargeable to CGT, I'm afraid.You can claim any expenditure of a capital nature incurred on the property as enhancement cost and this would reduce your gain for CGT purposes.Additionally, you claim estate agents' and solicitors' fee from the gain.Finally, you claim gains annual allowance (£11,100 for this tax year) before CGT is calculated.If the property is jointly owned, then each owner claims gains allowance of £11,100.CGT payable on net chargeable gain will be at 18%, 28% or a combination of both, depending on your taxable income including the gain in the tax year of sale. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
I lived in the property for 4 years and I have been renting it out for the previous 27 months. Will this make a difference ? If the property is going to be marketed for say £150000 and I bought it for £22,500 how much will the CGT be ? It is jointly owned by my wife and myself
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply..Let me do some calculations and I will revert to you shortly. many thanks
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Customer: replied 1 year ago.
Ok thanks
Customer: replied 1 year ago.
Hi so let me expand.
I bought the property in 1992 for £22,500 and have owned it since then so that makes it 24 years ownership to date.
Of those 24 years, I lived in it for 4 years and then it has been vacant till September 2013 whereby it has been let out since then to date (27 months)
I intend to market around the £150-160,000 mark.
The property is jointly owned in both myself and my wife's name.
I have carried out a fair amount of work on the property totalling around £10,000 but I do not have receipts.
Hope this is all the info you need
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for the information.Attached are my CGT calculations. I hope this is helpful.
Customer: replied 1 year ago.
That's great thanks a lot
So can I claim for the expenses even if I do not have any receipts ? Are the HMRC liable to ask for proof of documents ?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.It would be helpful to have some proof of payments in the event there is an enquiry.Otherwise, they could decline this expenditure.

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