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1.What date did you inherit the property? If it was after 2002 then your occupation is of no use to you in reducing your CGT exposure.
2. This is quite incorrect. The Annual Exempt Amount (AEA), currently 11.3K, is non cumulative.
3. The cost of dales including advertising can be deducted to derive a net selling price.
Was this house your sole or main domestic residence? Did you ever occupy it? Did you ret it out?
Correction under 3. delete 'dales' insert 'sales.'
1. Correct, Private Residence Relief (PRR) applies and although he is liable to CGT on the gain he made PRR relieves it at 100%. He will have no tax to pay.
2. Good, you understand the position regarding the AEA.
3. For the last 18 months of ownership you are deemed to be in residence even if this is not the case and PRR is extended. There will be an adjustment to your gain to be made. Take the total ownership time in months. Now take that less 18 months. The second figure over the first will give you the proportion to reduce your gain. Now deduct the AEA. The balance will be taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. 92.5K - 11.3K = 81.2K, so a worst case scenario is a tax bill of a tad over 22.7K. It will be less than that though.
I assume that your brother never paid any rent to you for his occupation.
I do hope that you have found my reply of assistance.
Say 62% of the gain is taxable, that is 57K so the worst case tax bill is of the order of a tad under 16K.
The 18 months assumed occupation is provided for in the legislation. It used to be 3 years, but has since been reduced. Even HMRC accept that landed property cannot be disposed of as quickly as, say, a secondhand car.
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Delighted to have been of assistance.
Thank you for your excellent support.
I suggest that you employ an accountant with a more comprehensive knowledge of Capital Gains Tax than is currently being displayed.
For the last 18 months of ownership you are deemed to be in residence even if this is not the case. This rule has been in place many years, indeed it used to be 3 years until reduced to 18 months. There is no requirement to prove anything and the advice you have received is mere balderdash and piffle.
Pleased to have been able to point you in the right direction.
I can only suggest that you approach accountants with a more comprehensive knowledge of CGT than is currently being displayed. If you owned it and occupied it as your sole or main domestic residence then for that period and the last 18 months of ownership PRR applies. Any other interpretation so simply balderdash and piffle. HMTC employees only answer telephone queries from a very restrictive set of prepared answers and anything outside these leaves them unable to effectively respond.
Only if it were your sole or main domestic residence.
Sorry, how could it have been before you owned it?
Just to make absolutely certain which you owned, did not rent.
We are going round in circles and you are not answering my questions. You say you did not live there so where did you live? Did you own the residence or did you rent it?
Yes, I've got that, but did you own that house or rent it?
This does not alter my original answer. Your PRR entitlement is for the last 18 months of ownership only.