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Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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we own a flat we let out and have now retired and are about

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we own a flat we let out and have now retired and are about to live in it.when we sell what are the capital gains implications?
We lived above a pub and were required to live in ,originally as managers(5years) and the last 14 as lessees.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience. May I ask if you have ever lived in the property before please?
Customer: replied 3 years ago.
Thank you. There is obviously no difficulty with your moving into the property and not capital gains tax arises if you do so. When you come to eventually sell the property if there is a gain between the amount you paid for it and the amount you sell it for you will pay CGT on the difference at either 18% or 28% depending upon whether you are a basic or higher rate tax payer unless you made "an election" to HMRC in the past notifying them that although you don't live there you are electing that property as your pricipal private residence. If you did that you would owed no CGT on the gain from the date you made the "election" in writing to them. If you did not make an election notice to HMRC then unfortunately CGT will be owed at the above rate for the period of gain you did not occupy. However you can deduct certain reliefs against the amount of gain. First you will not pay CGT for the period of gain for any period you actually live in the property as your main residence. Second you can also deduct a further period of 18 months before you move in (this is a further allowance allowed by HMRC). Second if you have spent money on improvements to the property you can also deduct these monies from the gain. Also you can deduct costs of acquisition and sale (e.g. agents and solicitors fees). Finally each person has a £11,100 allowance for CGT and you can deduct this. If the property is owned by both of you, you can deduct £11,000 twice - once for each of you. The above allowances will allow you to reduce the amount of any gain you have to pay CGT on. I hope the above is of assistance? If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today or just reply back to let me know if the above is helpful. Your feedback is important to me. If there is anything else I can help with please reply back to me I'd be very grateful
Customer: replied 3 years ago.
are managing agent fees deductible during letting period and are repairs deductible.Can an election to HMRC be done retrospectively?
Unfortunately elections cannot be made retrospectively except during the first 2 years of ownership I am sorry to say. Letting agents fees cannot be deductd from capital gain but they can be deducted from any income tax owed on the rent received. Does the above answer all your questions or is there anything I can clarify or help you with any further?
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