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I bought a flat recently with some money I borrowed from a

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Hello Tony,
I bought a flat recently with some money I borrowed from a relative, until I sold the one I live in and own.
Unfortunately I have been unable to sell my original flat, so have considered putting the new purchase back on the market.
However due to it being a wise move I am able to sell it at for about £40,000 more than I bought it, excluding expenses of between £5-10,000!
I have an income of £20,000pa and bought the new flat in good faith intending to live there when my original flat which I have owned for 16 years was sold.
Can you please confirm that I would be liable to CGT on the sale and of so, roughly how much?
With thanks,
Dave Evennett (Wirral)
Submitted: 4 months ago.
Category: Tax
Expert:  Sam replied 4 months ago.

HI Dave

Has this new home been your main residence from the date of purchase(and will be) until the date of sale) By this I mean did you move all your personal possessions to this new property and also change all your contacts to this new address (bank, doctors, dentists, employers, council tax etc etc )

Hoe long has/had the original property been on the market for ? and will you move back here and it become your main residence again?

Thanks

Sam

Thanks

Sam

Customer: replied 4 months ago.
I have not taken up residance in the new home, however I pay council tax on it and a 6 monthly service charge. No furniture has been moved over. The original property has been in the market for 10 months and as I say, i still live in it. I have lived here in it for 16 years.
I have spent money and time on the new property and further work is planned to bring it up to scratch.David
Expert:  Sam replied 4 months ago.

Hi David

Thanks for your response

Then you will have a capital gain position of this new purchase as this never became your new residence, and the gain will be the profit made (difference between sale price and purchase price)

From this profit you can deduct the costs to buy and sell (so any stamp duty. legal costs to buy and sell and estate agent fees) and also any capital improvements such as new kitchen and bathroom (as in complete replacement)

If then there is any gain left over, then the first £11,100 is exempt and any remaining gain will be liable at 18%

If you would like me to look a little closer at an actual tax figure that will arise - please advsie the costs to buy and sell and any capital improvements made, with what was undertaken and the costs. And the sale value and purchase price

Thanks

Sam

Customer: replied 4 months ago.
Ok that is helpfull thank you. However I have read somewhere of a tax rate of 28%.
Can you confirm that I will not be affected by that please.
Expert:  Sam replied 4 months ago.

HI

Thanks for your further question

There are two rates of capital gains 18% and 28% = as the most your gain will be is £30,000 (after costs) less £11,100 leaves £20, 900 and you have £21,000 unused basic rate band £43,000 less annual income £20,000) then your remining gain (if any) will only be liable to 18%

If you have all that you need it would be appreciated if you could rate me for the level of service I have provided

Thanks

Sam

Customer: replied 4 months ago.
Ok thank you, ***** ***** what I wanted to be sure of.... I am happy to rate your help at 100%.Best regardsDavid
Expert:  Sam replied 4 months ago.

Hi David

Thanks for the feedback, and thanks for accepting (click accept or rate the level of service provided)

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13695
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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