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 bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3111
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I bought a buy to let property 4 years ago but did not rent

Resolved Question:

hello. I bought a buy to let property 4 years ago but did not rent it out. I allowed my parents to stay there for free. I now want to sell the property what is my tax liability? I am a higher rate payer of income tax. Thank you
Submitted: 6 months ago.
Category: Tax
Expert:  bigduckontax replied 6 months ago.

Hello, I am Keith, one of the experts on Just Answer, and plesed to be able to help you with your question.

On the assumption that this was not your sole or main domestic residence you will be liable for Capital Gains Tax (CGT) on the gain made on disposal. The gain is the difference between the net selling pirce ie fater deducting selling costs including advertising and the acquisition price. The latter is the purchase price plus pirchase costs including Stamp Duty Land Tax plus any improvemnets eg installation of double glazing, central heating, extensions but not routine maintenance. This will be levied at 28% on the gain less your 11.1k non cumulative Annual Exempt Amount (AEA).

I do hope that you have found my reply of assistance.

Customer: replied 6 months ago.
Thank you but what about tax re interest part of my repayment versus capital part of my repayment? also would my parents count as dependent relatives and can this be claimed. I did not receive any payment from them at all. thanks
Customer: replied 6 months ago.
also with the AEA is that something i can claim every year I own the property or only once on selling> for example I have owned the property for 4 years?Thank you
Customer: replied 6 months ago.
What about dependant parents exemption ?
. Also does mortgage interest paid count as purchase costs ?
Expert:  bigduckontax replied 6 months ago.

The interest element would indeed be allowable against any rental income received, but as there was none there is no relief available.

Dependent relative occupation used to be allowable in the CGT computation, but is no longer, blame Gor***** *****:

'A Relief from capital gains tax on the sale of a house inhabited by a dependent relative only applies to a residence acquired before April 5 1988. That was one of the tax concessions phased out by Gor***** ***** as part of his drive to boost the coffers of the Inland Revenue.'

AEA, as I explained in my original answer is a non cumulative item. You get it ionly in the year you sell.

Mortgage interest does not come into the purchase costs, but the charges imposed to obtain the mortgage do.

Please be so kind as to rate me before you leave te Just Answer site.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3111
Experience: FCCA FCMA CGMA ACIS
bigduckontax and 3 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 6 months ago.

Thank you for your support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions