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Without the purchase price for the second home I am unable to calculate the possible CGT liability. Was this home let out at any time?
CGT is levied at 18% or 28% or a combination of the two rates depending on the donor's income including the gain in the tax year of disposal.
The gain is 500K - 85K = 415K, that is 207.5K each. From this deduct their non cumulative Annual Exempt Amount (AEA) of 11.3K leaves 196.2K exposed to the tax. That would be in this case 29K @ 18% [5.22K] and 167.2K @ 28% [46.8K], total tax due a tad over 52K.
Bad news, 52K each.
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