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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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recently sold property (dec 13) having owned it for 25 years,

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recently sold property (dec 13) having owned it for 25 years, lived in it first 8 yrs 3mnths.. was then let for following 15 years.. then empty for last two.. having moved out I lived in a rented room.. (few years) then purchased second property which I lived in approx. 7 years.. then sold that property and moved back into rented room for last few years. original property cost 51 sold at 136 (gain 85) my question -will I be able to claim either `privatw residential' or `letting relief' on this gain..? john


Can you tell me the month and year you bought the property please. Was it let for exactly 15 years apart from tenant changeovers? If you know, let me know the month and year it was first let and the month and year the letting finally ceased.

Customer: replied 4 years ago.

purchased july 1988 -I moved out end of oct 96 was let until end of march 2012 -then remained empty whilst being repaired/redecorated etc. up til sale on 9th of dec 2013 -so virtually 16 years (191 months?)


Leave this with me while I do some calculations and draft my answer.
Customer: replied 4 years ago.

ok, thanks.. and regards XXXXX XXXXX total rental was 15 years and 5 months.. (185 months) -rather than 191 (total time from moving out to sale)

Thanks for the additional information.

When you sold the property in December 2013, you made a gain of £85,000 (£136,000 - £51,000). By that time you had owned it for 305 months of which you lived it for 100, let it for 185 and it was vacant for 20. You can take account of the costs of buying and selling the property (legal fees, survey fees, stamp duty, selling agent fees etc) when calculating the gain so you may need to make some adjustments for your tax return.

The gain for the period the property was your main home is exempt from CGT as is the gain for the last 36 months of ownership. That accounts for £37,902 (£85,000 / 305 x 136). The remaining gain of £47,098 is that part of the letting period gain which is not covered by the last 36 months of ownership (£85,000 / 305 x 169). The gain for the vacant period is covered by the last 36 months of ownership.

As the property was both your main home and it was let you are entitled to letting relief which is the lesser of:

1 £40,000,

2 the sum of the main residence gain and the gain for the last 36 months of ownership of the property which is £37,902 and

3 the letting period gain of £47,098.

Letting relief of £37,902 will reduce the remaining gain to £9,196 and the annual CGT exemption of £10,900 for 2013/14 will cover the balance so there should be no CGT to pay.

I hope this helps but let me know if you have any further questions.
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