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Sam, Accountant
Category: Tax
Satisfied Customers: 14195
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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We have just completed (Friday 27th Nov 2015)on the sale of

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We have just completed (Friday 27th Nov 2015)on the sale of a flat which we bought as an investment in 2003. What are our capital gains liabilities, also what expenses etc are deductable? Do I make the return in this current tax year, i.e next year ? My wife's ends 31st December, mine ends 31st March. I have still to make our online returns for 2014/15.
We are borh self employed
Thanks for your question
You will have an initial gain which is formed by the sale price less than purchase price.
From this initial gain you can deduct the costs to buy and sell (so legal and estate agent fees etc) along with any capital improvement costs such as new bathroom, kitchen etc.
You do not indicate that you have ever used this as your main residence, so there are no furtehr tax reliefs.
Then half of the gain less half of the allowable costs leaves half the allowable gain for each of you, of which the first £11,100 is tax free, as this is the annual exemption allowance.
Then the remainder is charged at either 18% or 28% or a mix of the two (this is determined by your usual annual income - if you are 40%= taxpayer then all the gain will be at 28% if you are just a basic rate taxpayer then any unused basic rate band can allow that same amount of gain to be charged at 18% and then any furtehr gain at 28%
This sale as it took place in the 2015/2016 tax year does not need to be reported until the 2016 self assessment (issued after 06/04/2016) and any tax due paid no later than 31/01/2017
Let me know if I can be of any further assistance
Sam and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Is the £11,100 exempt for each of us. Does this apply to capital gains or is it just our usual self assessment allowance ? Does Osborne's recent changes to sale of investment properties apply now i.e. to us ? If so how does it impact ?
If the property is in joint names then you each have the annual exemption allowance of £11,100 tax free - and this is just the capital gains exemption allowance - you still each would qualify for your personal allowances (subject to levels of income) at the rate of £10,600 for 2015/2016
The changes proposed should not affect you as they relates to wear and tear relief and tax relief on buy to let mortgages/loans all of which come into effect from 2017
And the element that related to capital gains is the same as it always was the 18% and 28% tax bands so for you there is nothing that would affect the advise I have offered already (other then potential reduction of higher rates (28% ) of the gain
Customer: replied 2 years ago.
Thank you - I think that answers all my queries.
You are very welcome