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As you lived in the initial property until sale, and the sale date is treated as the tax timeline for capital gains, as it had been your main residence throughout the term contract is not subject to capital gains BUT did the purchaser pay you interest of the loan repayments and have you declared these to HMRC?
Property 2 again as this was your main home from Sept 2014 to sale in April 2016 there is no capital gains as any profit is covered again under the private residence relief rules BUT any interest paid is income that should be declared to HMRC.
Ths interest should be declared at each tax year end (so after 5th April each year (as tax year runs from 6th April to following 5th April) and the rate is dependent on what your other annual income is. So could you advise
1) The interest received for each tax year (2013/2014 2014/2015 2015/2016) and
2) Your annual income for those years
I can then advsie the tax due and at what rate
Lovely - I shall await the information in due course
Thanks for your response
The legal and advertising costs would be set off against the capital gain for 2013/2014 House Insurance not allowable as no rental income - so your total income fir 2013/2014 was 25252 less personal allowances of £9440 = so £15812 liable to tax at 20% = £3162.40 less paid against the other gross income
For 2014/2015 , total income £30379 less personal allowances £10.000 leaves £20379 liable to tax at 20% = £4075.80 less paid against gross income
Insurance costs not allowable
For 2015/2016 total income £36818 less personal allowances £10,600 leaves £25918 liable to tax at 20% = £51836.94 less tax paid on the gross income
But you cannot claim clearance and clearance costs against any interest you may have received - as these can only be offset against any rental income which you do not have - sow e may need to revisit this liability.
Travel to and from work is not an allowable expense so there is not a claim here to offset against your income
Thanks for your further questions
My apologies for consufing you re the legal and advertising costs< These can only EVER be offset against a capital gain, and as you do not have one, there is nothing to offset these costs against.
You advsie that the option to buy has not been take up on property 2 but you state "From September 2013 to September 2014 I rented a house for my own use. I purchased the same house outright out of my savings in September 2014. I improved it and sold it at a profit in April 2016 on a 10 year installment contract. On exchange of contracts I received a deposit." - so a contract to sell has taken place - has it not - please clarify as this seems conclusion from HMRCs point of view
The travel expenses are not allowable - as you state you work from home - so if this is the cae how can you then have travel expenses - what locations and why the travel - please expand further
Yes the capital gain is treated as having arisen at the time the contract is signed - regardless over what period of time payments may be made. As soon as you accept the deposit under these conditions the scene has been set and the time line created. The completion isnt just delayed under the normal rules, its part of the agreement you have drawn up to allow the purchaser to pay over a long period of time. There may be scope to ask HMRC to consider this under delayed completion rules, but its a long shot.
The repairs are it allowable under property 2 as these were made after the tenant vacated the propriety so were to get the property back into a rentable/sell able state. These are therefore not allowable against rents received, which should also have been declared to HMRC
Really this should now be listed as anew question with a new amount offered as going right off the original topic, but as this is your first time on Just Answer, I will reply within the price offered for this post, on this occasion.
No agency work is never self employment as the agency provides the client end user for you - so its not a direct contract with the client, so always employment
And still the travel would not be due as this then becomes your normal place of work (which applies both for employment and self employment)