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Sam
Sam, Accountant
Category: Tax
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My husband and I bought the council house we lived in since

Customer Question

My husband and I bought the council house we lived in since Dec 1990 in Sept 2001. I bought another house with a friend in Oct 2007 and lived between both houses until Dec 2011 when husband died. House then transferred to my own name and I lived in house till march 2013. Rented out till Nov 2016. Back living there but considering selling. Would I be liable for capital gains tax and if so what percentage. Bought for 19,000 from local authority and probable selling price would be around 110,000.
Submitted: 16 days ago.
Category: Tax
Customer: replied 15 days ago.
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Expert:  Sam replied 15 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 15 days ago.

Hi

I have sent you a telephone request as you indicated you would like a telephone call

Thanks

Sam

Expert:  Sam replied 15 days ago.

Hi

I have made a provisional calculation for you as you do not appear to be online and although i need to know more about whenyou split you time between this purchased ex council house and the property you bought with a friend - where did you spend most of your time and dd you elect which one was to be treated as you main residence with HMRC? I can advsie assuming the other property was your main residence you still will have a NIL gain arising

The intial gain is the sale price less the purcahse price which is £11,000 less £18,000 which = £91,000 from this can be deducted the costs to buy and sell such as legal and estate fees and any capital improvements (such as anew kitchen or new bathroom) but ingoring this

This was your main residence from SEpt 2001 when you purchased the property (and its from then that the private residence relief starts from) until Oct 2007 then again from DEc 2011 to March 2013 - so this time 87 months plus the last 18 months of ownership 18 months allows 105 months out of a possible ownership period of 183 months. When this is applied against the £91,000 x 105/183 - £52213 is exempt so this leaves just £28687 to consider but then you are also due private lettings relief as you rented out a property that was once your main residence> private lettings relief is the lesser of

1) the mount of gain on which private residence relief is due which is £52213

2) the amount of gain left over after the private residence relief has been applied - so £38687 OR

3) £40.000

as the lesser amount is 2) 38687 this is deducted form that remaining gain of £38687 so you ahve NIL capital gain so no capital gains tax to buy once this property is sold

Let me know if I can assist further or if this property remined your main residence from Oct 2007 to Dec 2011 - this is usually determined by where you spent most of your time and conducted most of your life from ? Where your doctors and bank etc were registered at and where all your personal possesions were held - if at the new property than this calculation is accurate if this needs to change then let me know and I can recalculate for you

Thanks

Sam

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