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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15838
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have just sold my mobile home,for £40500 and want to know

Resolved Question:

I have just sold my mobile home,for £40500 and want to know if I am liable for tax on the sale, I'm retired and live on my pensions
Submitted: 8 months ago.
Category: Tax
Expert:  TonyTax replied 8 months ago.

Hi.

Did you live in the mobile home for the entirety of your ownership of it?

Customer: replied 8 months ago.
No married and left joint owner in possession until she died
Expert:  TonyTax replied 8 months ago.

Are you sure you want to pay for a phone call on top of the cost of the question? I'm sure I can answer your query without the extra expense.

Customer: replied 8 months ago.
continue on line
Expert:  TonyTax replied 8 months ago.

OK.

Expert:  TonyTax replied 8 months ago.

Thanks.

Can you tell me how much your share was. How long did you own a share of the mobile home? Did you inherit your spouse's share when she died? Was the £40,500 the sale price for your share or the whole? How long ago did you move out? What did the home cost to buy?

Customer: replied 8 months ago.
We bought the Park Home 40 years ago cost if I remember was around £ 10,000 we bought it together the sale price was in total I inherited my friend half and still retained my half for which I paid the ground rent and insurance after nI married and moved out 27 years ago
Expert:  TonyTax replied 8 months ago.

Thanks.

Last question. Do you know what the mobile home was worth when you inherited your friend's half?

Customer: replied 8 months ago.
It was insured for £37,000 but has work done on it since I inherited
Expert:  TonyTax replied 8 months ago.

Thanks.

Leave this with me while I do some calculations. They will take a while so please bear with me.

Expert:  TonyTax replied 8 months ago.

You should cancel the phone call request to avoid another expert calling.

Only gains made since 31 March 1982 are taxable so you would need to know what the mobile home was worth as at 31 March 1982 to get a truly accurate gain figure. In addition, as you inherited your late friend's half, that half will have a cost equal to its value when your friend passed away so your cost for CGT purposes will be greater then £10,000. The costs of improvements (not general maintenance) can be deducted from the gain. However I will use a cost £10,000 for the purposes of this answer.

From March 1982 to the present is about 34 years. You appear to have lived in the home until about 1989. The gain for the period that it was your main home will be exempt from CGT as will the last 18 months of ownership regardless, a total of 8.5 years. That covers £7,625 of the gain (£30,500 / 34 years x 8.5 years). That leaves £22,875 (£30,500 / 34 years x 25.5 years). The first £11,100 of that will be tax free so you are left with a net taxable gain of £11,775.

There are two rates of CGT for residential property, 18% and 28%. The rate or combination of rates that you will pay will be dependent on the level of your income in 2016/17. Assuming that your income is no more than £31,225 per annum pre-tax, you will pay CGT at 18% on £11,775 (£2,119.50). If all the net taxable gain was taxable at 28%, the CGT would be £3,297.00). Ultimately, your CGT liability should be lower than either £2,119.50 or £3,297.00 since your cost will be higher than £10,000 as I described above.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15838
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 8 months ago.
Will you please E Mail this info and thank you very much
Expert:  TonyTax replied 8 months ago.

I can't email it I'm afraid.

What you can do is to cut and paste the answer into an email addressed to yourself. Alternatively, you can save the question web page address into an email addressed to yourself so that you can revist the page as often as you need to. The question will remain open as long as you need it to.

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