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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5143
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Type Your Tax Question Here... is online now

I have recently sold a rental property which I purchased

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I have recently sold a rental property for 237k which I purchased for 132k in 2003 this was our home until 3 years ago.
I have since purchased 2 flats for 185k for rental with the proceeds
please could you let me now if there are any tax implications and what they may be?

Hello and welcome to the site. Thank you for your question.

Please give me little time to do some calculations for you.

In the meantime please advise month of purchase and sale

Many thanks

Thank you for your patience ..

In the absence of your reply on month of purchase and sale, I have made these assumptions in my calculations ..

date of purchase - Jan 2003
date of sale - Dec 2014

The good news is there is no CGT payable as all gain is covered by private residence relief and letting relief..

You have owned the property for 12 years and 9 years are covered by private residence relief. In additional there is a relief for a further 18 months called the final period relief
This leaves you with approx 18 months period that is chargeable for CGT purposes.
As the property was your main residence before you let it, you get letting relief up to a maximum of £40,00. The gain applicable to 18 months is only £13,125 and this is covered by letting relief.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond. and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

many thanks for your help do I need to include this info on my short tax return?

As your chargeable gain is zero, you don't have to include the calculations but you must report a gain as the proceeds were over £43,600

Many thanks
Customer: replied 3 years ago.

many thanks for your help

Great service

My pleasure.

Best wishes