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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hi, during the 2014/15 tax year I sold a second house which

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Hi, during the 2014/15 tax year I sold a second house which I purchased for my mother in the sum of £185,000, spent £15k doing it up and then I sold it for £265k. My mother was living in it all the time although it was registered in my name. I presume I have a tax liability for the gain ?

Assuming that the property was bought after 5 April 1988, you will have a liability to Capital Gains Tax on the gain of £65,000 (£265,000 - £185,000 - 15,000) assuming you don't have a huge amount of unrelieved capital losses to offset against the gain. The first £11,000 of the gain will be exempt from CGT so that will leave you with a net taxable gain of £54,000. HMRC may ask for proof of the £15,000 expenditure.

There are two rates of Capital Gains Tax, 18% and 28%. The rate or combination of rates that you will pay will be dependent on the sum of your income and the taxable gain in 2014/15. One of the following scenarios will apply to you:

1 If your income and the net taxable gain combined are £41,865 or less, then you will pay CGT at 18%.

2 If your income alone is more than £41,865, then you will pay CGT at 28%.

3 If your income alone is £41,865 or less but the addition of the net taxable gains takes you over £41,865, then you will pay some CGT at 18% and some at 28%.

I hope this helps but let me know if you have any further questions.
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Customer: replied 3 years ago.

Hi, thanks for the prompt response. Just one more quick question - I presume I put this onfo on my tax return for the 14/15 tax year and not hte 13/14 tax year ? Thanks !

If you exchanged contracts after 5 April 2014, then the gain will need to be reported in your 2015 tax return.