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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4717
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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2 Questions. 1/ I am in receipt of a company car and also

Customer Question

2 Questions.
1/ I am in receipt of a company car and also fuel card whereby I can expense personal fuel. I understand I am paying a BIK percentage of £20K for this benefit, however I am not doing anywhere near enough personal miles for this to be a benefit. Am I able to claim back tax paid with mileage records or similar?
2/ I am about to sell a house and make roughly £50K profit. Am I liable for capital gains tax on this profit? I moved out of the house around 18 months ago and got some tenants in. I currently rent the property I am living in.
Submitted: 5 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 5 months ago.

Thank you for your questions

[Q1]

If you pay for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.

As far as car benefit goes, provided there is any private use, then BIK percentage would be applicable in full.

[Q2]

If the property is question was your only and main residence before you moved out into a rented property, then your capital gain will be covered by the reliefs as follows:

- private residence relief for all period the property remained your main residence

- final 18 months of ownership as the property was your main residence at some point during period of ownership

- letting relief available for the period property let

More information on private residence relief is covered here

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2016

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 5 months ago.
Many thanks, ***** ***** point for clarification.1/ The card I have means I expense all fuel. How would I go about paying the 'full cost of all personal' fuel. Is there a rate per mile I should pay to my employer? I can obviously log my business and personal mileage, but then what do I do with that in order to cover my personal miles and negate the tax on the benefit?2/ I don't really understand the relief points you make, I'd actually already read the .GOV pages prior to visiting this site to ask the question as it was unclear? Are you able to break it down for me a little more - I can give you dates I moved in/out etc?Thanks,
Expert:  taxadvisor.uk replied 5 months ago.

Thank you for your reply.

If you agree with your employer the private use element of car use and say it is 15% of total mileage, then paying back to your employer 15% of the fuel costs would negate tax on fuel benefit.

Break down of private residence relief -

Main residence say Dec 2011-Nov 2014 = 36 months

moved out and rented say Dec 2014 to Jul 2016 = 19 months

Period of ownership (36+19) =55 months

Gain on sale £50,000

Period of ownership - months 55

Period as main residence - months 36

Additional relief - 18 months

Private residence relief - months 54

(there is an additional relief to cover last 18 mths

of ownership (HS283 - example 9 )

Potential capital gain £50,000

Gain covered by private residence relief

54/55) x 50,000 £49,091

Gain subject to capital gains tax (50,000-49,091) £909

Letting relief - maximum £909

This is lower of

- £40,000 per owner £40,000

- Private residence relief £49,091

- Gain on the part of the property that's been let £909

Net chargeable gain after letting relief £0

I hope this is helpful

Expert:  taxadvisor.uk replied 5 months ago.

If my example is unclear, I will be happy to carry out CGT calculation based on your dates.

Many thanks

Expert:  taxadvisor.uk replied 5 months ago.

HI there, just checking to see if you need further clarification or have points raised by you not addressed in my responses.

Many thanks

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