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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15914
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I bough my flat in 1990 and I move out in 1999.

Customer Question

Hi I bough my flat in 1990 for 25k and I move out in 1999. It has been rented out most of the time since. I am told it will sell for 300k. The mortgage is 90k. What will I have to pay in capital gains tax please. Sandra
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Can you tell me what month in 1990 you bought the property, what month in 1999 you moved out and confirm that when a tenant moved out the flat was still available for letting please.
Expert:  TonyTax replied 1 year ago.
I would normally divide the gain into complete months as opposed to years but this will give you an idea of where you stand: Total period of ownership : 26 yearsTotal period of occupation by you: 10 yearsTotal period of letting: 16 yearsGain: £275,000 (£300,000 - £25,000)Exempt gain: £121,635 (£275,000 / 26 x 11.5 (10 + 1.5)Letting period gain: £153,365 (£275,000 / 26 x 14.5 (16 - 1.5)Total non-exempt gain: £153,365 Letting relief: £40,000 (lesser of £40,000, £121,635, and £153,365)Taxable gain £113,365 (£153,365 - £40,000)Annual CGT exemption £11,100 Net taxable gain £102,265 CGT is charged at 18% or 28% or a combination of the two depending on the level of your income in the tax year of disposal. The most that can be taxed at 18% in 2015/16 is £31,785, the whole of the 20% tax band. That figure will be reduced by the excess of your income over the personal allowance of £10,600. The CGT will not be lower than £25,455.70 (£31,785 @ 18% + £70,480 @ 28%). The CGT could not exceed £28,634.20 (£102,265 @ 28%) Take a look here for information on the main residence and CGT:https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-reliefI hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 1 year ago.
Hi, I'm just checking in to find out if you need further advice or clarification.

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