How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TonyTax Your Own Question
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
Type Your Tax Question Here...
TonyTax is online now

I bought a flat in 2001 for £20 k and let it out I need to

Resolved Question:

I bought a flat in 2001 for £20 k and let it out I need to sell it and have it on the market for £45 k I use my normal 20% tax allowance in total paying tax on rent and pension. I understand the taper relief based on years of ownership is now defunked is that true and how much capital gains do you reckon I will need to pay based on figures above . kind regards Jack
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. I'm assuming the property was never your main home. You will make a gain of £25,000 which can be reduced by the expenses you incurred on purchase and will incur on sale (legal fees, stamp duty (none at a guess), survey fees, selling agent fees). The first £11,100 of the gain will be tax free so that will leave a net taxable gain of £13,900. There are two rates of CGT, 18% and 28%. The rate or combination of rates that you will pay is dependent on the level of your income in the tax year you sell the flat. The most that can be taxed at 18% in 2016/17 is £32,000 but that will be reduced by £1 for each £1 of income you have in excess of £11,000. Any balance of the net taxable gain not taxed at 18% will be taxed at 28%. There has been no taper relief since 6 April 2008. Your CGT liability will be somewhere between £2,502.00 (18%) and £3,892.00 (28%). I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks for that I have found my tax info for2015 to 2016 they have given me the following tax code k187 personal allowance 11000 state pension 6978 prop income 4105. underpayment restriction 1800 .1883 to be added to this income. I am sorry I dont understand the detail this may help you in assesing approximatly how much I will need to pay on prop sale at 45000 thanks again
Expert:  TonyTax replied 1 year ago.
If your income in 2016/17 is about £11,100, then you will pay income tax on £100, maybe less a your rental income won't be received for a full tax year. That will mean that all the net taxable gain of £13,900 will be taxed at 18% so you should pay around £2,502 in CGT.
TonyTax and other Tax Specialists are ready to help you

Related Tax Questions