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My wife owns our second home which we want to sell. The original

Resolved Question:

My wife owns our second home which we want to sell. The original cost in 1999 was £77,900. The expected sales price is £400,000. My wifes annual taxable income is £13,000. I assume there is no indexing of the cost now. I calculate the CGT to be ££87,288. Is this correct?
Submitted: 12 months ago.
Category: Tax
Expert:  Sam replied 12 months ago.
Hi Thanks for your question Assuming this has always been the second home and its just in her name thenThe gain is &pound;322,100 from which you can deduct costs to sell and buy (so legal and estate agent fees etc) and also the costs of any capital improvements such as total new kitchen or bathroom etc ( so you deduct these costs at this stage) Then from this the first &pound;11,100 is exempt - which leaves &pound;311,000 and this will be charged at a mix of 18% and 28%First the unused rate band forms the amount chargeable at 18% - so &pound;31785 = &pound;13000 = &pound;18785 x 18% = &pound;3381.30 then the remaining gain liable to 28% - so &pound;311,000 less &pound;31785 = &pound;279,215 x 28% = &pound;78180.20 plus &pound;3381.30 = &pound;81561.50 (so a little less than you thought!) Thanks Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13704
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax

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