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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5147
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My wife and I own a rural Dwelling with garden and paddock,total

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My wife and I own a rural Dwelling with garden and paddock,total 6 acres,the run down property cost £24K in 1978, I lived in the property for 3 years,then knocked down the old dwelling and did a self build bungalow.I now wish to sell one acre,the agreement is that the buyer obtains planning permission and I then sell the plot for £265K. My calculations indicate that We can obtain a final sum of £200K after CGT,I want to check if my calculations are approximately correct,as I am not certain about the allowances on the 18 % tax band,
So selling sum £265K, tax relief 2 x £11,100 leaving £242,800 taxable. My wife income is £16000 and mine is £26000 this includes some investment income,The upper tax band is £42386 so can my wife and I BOTH claim to pay the lower tax band rate of %18 on the difference between our incomes and the £42386 limit ?? If so I estimate the tax payable as follows, £265000 - £22200 relief =£242,800 tax liable. Total sum to be taxed at 18% is £42772 ( £42386 minus£16000 plus £42386 minus £26000) so tax at 18% is £7698,this leaves £200000 to be taxed at 28% so tax is £56000, total tax to pay is £56000 plus £7698 which totals £63,698 leaving us an approximate sum of £201K .I am not looking for exact figures Really I want confirmation that my method of calculation is correct,I am possibly aware that there may be some extra tax on the investment income in the year I pay the CGT,Also are their any other tax relief I may get on the sale of the land.?
Thank you for your question...I will revert to you shortly with confirmation of CGT calculation.What cost have you provided for the land being sold? Many thanks
Thank you for your patienceAttached is CGT calculation. I can confirm your method of calculation.You should offest the cost of land based on valuation at 31 Mar 1982 to reduce your gain.Land valuation office should be able to help you ascertain the valuation at that date. 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.
Customer: replied 2 years ago.
Thank you for the prompt reply,its nice to have the confirmation that I was calculating the CGT correctly,
Thank you for your reply.If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer. and other Tax Specialists are ready to help you
I thank you for accepting my answer.Best wishes.