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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15754
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a standard rate tax payer with income of approx 17k per

Customer Question

I am a standard rate tax payer with income of approx 17k per year ( from rental income and self employment as a shop keeper) I have sold a property that I rented out but my accountant doesn't know how to go about calculating the capital gains tax I owe. The propert was purchased in April (1st) 2003, I lived in it until 5th December 2005 from which time I rented it out. I sold it 6th December 2016.
The property was purchased for £145,000
And sold for £210,000,
Thank you
Submitted: 4 months ago.
Category: Tax
Expert:  TonyTax replied 4 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Customer: replied 4 months ago.
I doubt it makes any difference but this tax year my earning s will be less as I actually made a loss on my rental property and only about £12k earned from my self employment.
Expert:  TonyTax replied 4 months ago.

OK.

Expert:  TonyTax replied 4 months ago.

Your accountant should refer to HS283 for information on the main home and CGT.

I'm assuming you sold the property in December 2015, not December 2016 and that it was let to the point of sale. The gain was £65,000 (£245,000 - £145,000). You can also deduct the costs of purchase and sale (legal fees, stamp duty, survey fees, selling agent fees).

Total period of ownership to December 2015: 152 months

Period of owner occupation: 32 months

Period of letting: 120 months

Exempt gain: £21,382 (£65,000/152 x 50 (32 months + last 18 months of ownership)

Letting period gain: £43,618 (£65,000/152 x 102 months (152 - last 18 months of ownership)

Gross Non-Exempt Gain: £43,618

Letting Relief: £21,382 (lesser of £40,000, £21,382 and £43,618)

Annual CGT Exemption: £11,000

Net Taxable Gain: £11,236

CGT @ 18% or 28% or a combination of the two rates depending on the level of your income in 2015/16. Look here to see how to calculate your CGT rate. Based on what you told me, you will pay CGT at 18% (£2,022.48).

Customer: replied 4 months ago.
Can you email that to me so I can print it out please ?
Customer: replied 4 months ago.
Last year before I asked the same question based on a selling price of £200,000 ( as I hadn't sold it then ) and was told the CGT would be £990 by just getting £10,000 more does that sound the right hike in the tax ? ( I used this service to get that figure).
Expert:  TonyTax replied 4 months ago.

I can't do that I'm afraid as I have no access to customer email addresess. I suggest you copy and paste the text into an email to yourself.

Customer: replied 4 months ago.
I'll do my best, ***** ***** technical
Customer: replied 4 months ago.
Will that be enough for my accountant to fill out the form ?
Expert:  TonyTax replied 4 months ago.

If you got an extra £10,000, £6,711 would be taxable (152/102) at 18%.

Customer: replied 4 months ago.
That's about right then isn't it , thank you
Expert:  TonyTax replied 4 months ago.

It will be enough for your accountant.

Customer: replied 4 months ago.
I have probably over paid my income tax will they deduct that from the CGT I have to pay ?
Expert:  TonyTax replied 4 months ago.

Thanks.

Would you mind rating my answer before you leave the site please.

Expert:  TonyTax replied 4 months ago.

Yes, they will.

Customer: replied 4 months ago.
Thank you
Expert:  TonyTax replied 4 months ago.

Thanks.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15754
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 4 months ago.
Tiny you used the wrong sales figure it was £210,000 not £245,000
Customer: replied 4 months ago.
Tony sorry
Customer: replied 4 months ago.
it was 2015 not 2016
Customer: replied 4 months ago.
That's why it came out higher than I expected
Expert:  TonyTax replied 4 months ago.

I put £245,000 in the brackets early in my answer by mistake but the gain was £65,000 and that was what I used in my calculations. I missed the typo, sorry.

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