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Jamie-Law
Jamie-Law, Solicitor
Category: Property Law
Satisfied Customers: 13835
Experience:  Solicitor
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I own and let out a flat. If I were to sell the flat and buy

Customer Question

I own and let out a flat. If I were to sell the flat and buy a house to let instead do i still have to pay full capital gains. If I have to pay capital gains can you advise on how to reduce the amount I have to pay.
Submitted: 2 years ago.
Category: Property Law
Expert:  Jamie-Law replied 2 years ago.

Hello my name is ***** ***** I will help you with this.

What is the gain likely to be please?

Customer: replied 2 years ago.
Hi £60,000
Expert:  Jamie-Law replied 2 years ago.

Do you live in your own property?

Customer: replied 2 years ago.
Hi , yes.
Basically I bought the flat in 2000 for £67000 with my brother.
In 2001 I bought a house with my partner and decided to keep the flat as a rental investment.
However b4 moving out of the flat I had borrowed more against it to pay off mine and brothers bills
Plus I had to pay off my brother from his share as he didn't want to move forward in renting it out.
At the point of moving out of the flat and getting a second property the current mortgage was £99,000.
The current valuation is approx £160,000. I am hoping that I only have to pay cgt on the £61,000 gain.
Hope this makes things clearer. Thank you
Expert:  Jamie-Law replied 2 years ago.

Yes you would have to pay tax on the £60,000 (less expenses such as estate agent fees, Solicitor costs etc).

Assuming these come to £5000 then your gain would be £62,000.

You get the first £11,100 tax free so would pay on £50,900

You’ll either pay 18% if basis tax payer or 28% tax if higher on your gains,

You do it like this:

  1. Work out how much taxable income you have - this is your income minus your Personal Allowance and any other Income Tax reliefs you’re entitled to.

  2. Work out your total taxable gains.

  3. Deduct your tax-free allowance from your total taxable gains.

  4. Add this amount to your taxable income.

  5. If this amount is within the basic Income Tax band for the 2015 to 2016 tax year, you’ll pay 18% Capital Gains Tax. You’ll pay 28% on any amount above this.

Can I clarify anything for you about this today please?

​​

Customer: replied 2 years ago.
No that's all I needed thank you
Expert:  Jamie-Law replied 2 years ago.

All the best. If I could ask you to rate my answer before you go today, by clicking on the 5 stars or happy face, otherwise the site does not pay me for the time spent with you today. Thank you in advance and good luck!

Expert:  Jamie-Law replied 2 years ago.

If this answers your question could I invite you rate my answer 3, 4 or 5 stars before you leave today.

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