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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13862
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My husband is selling his property, and we are wondering how

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My husband is selling his property, and we are wondering how much portion of private residence relief he can use. He bought the property before our marriage, in January 2013 ; we got married in September 2014. I have my own property. He moved in with me in September 2013 and let his property since then. His income tax bracket is 45%.
We will continue to live in my property and intend to claim private residence relief when I sell my property.
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer (ex HMRC and now running my own accountancy business)The portion on which private residence relief is due will be the initial 8 months (Jan - Sept 2013) and also the last 18 months of ownershipso 9 + 18 = 26/totall period of ownership x gain Plus, if he let the property out continuously from Sept 2013 to date of sale then he would also be due private lettings relief, which is the lesser of 1) The amount of gain on which private residence relief is due OR20 The amount of gain left over once private residence relief has been applied OR3) £40,000 Then after this - the first £11,100 will be exempt (as this is the annual exemption allowance) and any gain that rmeians at this point will be liable to 28% capital gains tax Let me know if I can assist furtehr on my answer Thanks Sam
Customer: replied 1 year ago.
Thank you for your prompt reply.So, the fact he is married and we have two properties doesn't affect the private residence relief? If we apply the private residence relief for his flat sale, can we also apply if when I sell my property?I am not clear about [Plus, if he let the property out continuously from Sept 2013 to date of sale then he would also be due private lettings relief, which is the lesser of 1, 2, 3]
The profit after expenses of his property will be £200k. Then, the lesser amount will be £40k? 1) £200k, 2) £60k (70% is relief as of today) 3) £40k.If so, the bot***** *****ne of taxable income will be 200k - 140k - 40k - 11k = 9k ?
Expert:  Sam replied 1 year ago.
Hi Thanks for your response No - the private residence relief is awarded for the time this property was your husbands main residence and the last 18 months are automatically due when a property is vacated more than 18 months before the sale dateWhat about the private lettings relief are not clear about - this is an additional relief on top of the private residence releif due, and is applied after the private residence relief amount has been established. If you wish me to make the calculation for you -(as you are applying the reliefs wrongly) I am afraid this will involve an additional charge as its more than your original questions suggested you needed help with - and if you would like to proceed with this then I can send an additional Q & A request or the option for you to make a telephone request (I am in the UK!) I am sorry but this is how Just Answer works Or I can offer you the formula to apply against your own figures. Let me know how you wish to proceed and if you do wish me to make the calculation for you then I would need to know1) What was the purchase price2) What expenses are you deducting?3) When was the property sold and how much for 4) Legal and other selling and buying costs - amounts please5) Any capital expenditure such as new bathroom and kitchen6) Was the property let from Sept 2013 to sale date and did rental incomes get declared to HMRC7) Confirm this property remains in your husbands sole name Thanks Sam Thanks Sam
Customer: replied 1 year ago.
Hello Sam,Just to be clear, your answer 'No' is to 'the fact he is married and we have two properties doesn't affect the private residence relief?' or no to 'If we apply the private residence relief for his flat sale, can we also apply when I sell my property?'1) What was the purchase price : £3275002) What expenses are you deducting? about £32000 : Stamp Duty, legal fees(buying & selling), mortgage application fees, real estate agent fee3) When was the property sold and how much for £540000 in a month4) Legal and other selling and buying costs - amounts please :above. Legal £3000 in total, selling agent fee £180005) Any capital expenditure such as new bathroom and kitchen : £5006) Was the property let from Sept 2013 to sale date and did rental incomes get declared to HMRC : yes, we did declare and have been paying tax.7) Confirm this property remains in your husbands sole name: yesI registered for premium membership. Is the extra question will be within 'unlimited questions and answers?Thank you very much.
Expert:  Sam replied 1 year ago.
Hi Thanks for your question The fact you are married and have two properties has no bearing on the advise given as1) the private residence relief applies for the time that this property in question WAS his main residence (so prior to him coming to live with you) along with the last 18 months - and2) Private lettings relief is due as at some point this had been his main residence. Your initial question mentioned nothing about your current property but I will fully answer this along with the fact you wish me to make the calculation for you so I have sent a request for more Q & A time Whilst you may have registered for unlimited questions, we experts are still paid per listed question or for each of the additional services listed within each question - so I can either send an additional services request or you list as a new question as I have no dealings with the charge side of matters so you would need to check with customer services how an additional service charge would work within the subscription you seem to have signed up for. But it would be appreciated if you could rate me for the work I have undertaken so far - and of course if you have any further clarification you need on the intial questions responses, I am more than happy to assist on this. Thanks Sam
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Customer: replied 1 year ago.
Hello Sam,Thanks for the explanation. I need the calculation and I also want to know about when I sell my property. I will list another question as you suggest. Thank you very much.
Expert:  Sam replied 1 year ago.
Hi
You are very welcome
Thanks
Sam

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