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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15882
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have property that I want to sell. That was our first property.

Customer Question

I have property that I want to sell. That was our first property. We currently stay in another property. Is Capital gains tax applicable to me
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Can you tell me how long you have owned the property that you wish to sell please. Is it solely or jointly owned? Is it or has it been let? How long have you owned the property you are currently living in?
Customer: replied 1 year ago.
We have owned the property that we want to sell for 10 years and lived in the property that we want to sell for 5 years and 1 month. It is solely owned. Yes it had been rented out and the tenants are moving out this month.The have been living the current property for 4 years and 6 monthsPlease do let me know if you need any additional informationMany thanks
Expert:  TonyTax replied 1 year ago.
Thanks. Can you let me know how much the property cost to buy and what you hope to sell it for.
Customer: replied 1 year ago.
It costed us £137,000. We invested a further 35 thousand on the property and we are looking to sell it for £175,000.Hope this helps
Expert:  TonyTax replied 1 year ago.
Assuming the sale figure is correct, you will have no CGT to pay as the gain will only be £3,000 (£175,000 - £137,000 - £35,000). The annual CGT exemption is £11,100 per individual. I would say that HMRC may ask to see proof of the improvements costs in the form of receipts and invoices and may disallow any that you cannot prove. Photographic evidence may help.I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks a lot for this. Can I please keep this question open till about 5PM today before we close. Just in case I have any questions related to the above.Hope you don't mind this ?Many thanks
Expert:  TonyTax replied 1 year ago.
It will stay open as long as you wish it to.
Customer: replied 1 year ago.
Thanks a lot for that Tony. I will get back to you shortly.Many thanks once again
Expert:  TonyTax replied 1 year ago.
OK.
Customer: replied 1 year ago.
Hi Tony, I have the following bills for the expenses of 35K
- New Kitchen - £7070.00
- New fitted Cupboard in Bedroom 1 - £2020.00
- New fitted cupboard in Bedroom 2 - £1950.00
- Boiler replacement and Plumbing - £1790.00
- New Bathroom - £4500.00Based on the above can I request you to please let me know what my CGT would be. This will be my last question :)Many thanks
Expert:  TonyTax replied 1 year ago.
Is the property jointly owned? If so, did you both live in it for 5 years and 1 month?
Customer: replied 1 year ago.
No its a single owner
Expert:  TonyTax replied 1 year ago.
OK. Leave this with me while I do some calculations.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15882
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
ok thanks
Expert:  TonyTax replied 1 year ago.
If you sold the the property today for £175,000, you would make a gain of £20,670 (£175,000 - £137,000 - £17,330). You can also deduct the costs of purchase and sale (legal fees, stamp duty, survey fees, selling agent fees).Total period of ownership to March 2016: 115 monthsPeriod of owner occupation: 61 monthsPeriod of letting: 54 monthsExempt gain: £14,199 (£20,670 / 115 x 79 (61 months + last 18 months of ownership)Letting period gain: £6,471 (£20,670 / 115 x 36 (54 - last 18 months of ownership)Gross Non-Exempt Gain: £6,471Letting Relief: £6,471 (lesser of £40,000, £14,199 and £6,471)Annual CGT Exemption: £11,100Net Taxable Gain: £0 (£6,471 - £6,471 - £11,100)Even if you didn't claim any of the improvement costs, there would be no taxable gain. The exempt gain would be £26,104. Letting relief of £11,896 would cover the balance.Refer to HS283 for information on the main residence and CGT.
Customer: replied 1 year ago.
Hi TonyThanks a lot for your help with this. I has been really important and useful information for me. Really please that I got on to this site.Many thanks once again
Expert:  TonyTax replied 1 year ago.
Thanks.

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