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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5115
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My husband and I are thinking of selling our buy to let

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My husband and I are thinking of selling our buy to let property. We have owned it for 8 years. It is in both our names,. We may make approx £45,000 on this before fees. I earn approx 51,000 a year and he earns about 32,000 a year. We are unsure how much CGT we may have to pay and would like some advice. We have not done any real building works. But about 6 years ago we invested in a company called Green Oil and lost approx 8,000 in this investment when the company went into receivership and I have heard that I could offset this against CGT.

Thank you for your question..

If the property in question has never been your main residence for CGT purposes, then the whole gain after costs associated with buying and selling the property would be chargeable to CGT.

Lets say the gain after fees etc is £40,000. You would claim gains allowance against the chargeable gain (£11,100 in current tax year). This would leave you with (40,000-22,200) £17,800 of gain that would attract CGT (£8,900 each.)

As you are higher rate taxpayer you are likely to pay CGT on £8,900 at 28%.

Your husband will pay CGT on his share at 18%.

Now we come to capital losses .... you don’t have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset.

You say you invested £8,000 in a company that has gone into receivership. You should report a loss in your tax return to enable you to offset it against future gains..

More information on this can be found here

I hope this is helpful and answers your question.

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Best wishes