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The gain is the difference between the acquisition and sale values. Th former is the price paid plus purchase costs plus improvements eg installation of double glazing, central heating, extensions etc, but not routine maintenance. The selling price is net after deducting selling costs including advertising. Your 475K figure may need adjustment.
As to Capital Gains Tax (CGT) the following would be the computation. Your total ownership time is say 145 months. Your total occupation time is 59 months. Thus 86 / 145 = say 60% of any gain will be subject to CGT at 18% or 28% depending on your income including the gain in the 18/19 tax year. 285K of this will be exposed to the tax less your non cumulative Annual Exempt Amount (AEA) of 11.7K and Lettings Relief (LR) up to 40K leaving 233.3K taxable. Worst case scenario is a tax bill of say a tad over 65K, but it might be less (see above).
I do hope that you have found my reply of assistance.
475K - 20K - 40K -15K = 400K adjusting the worst case tax to say 53K, better than a poke in the eye with a sharp stick!
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I was taking it up to May. If I have made an error the correction eas easy enough, just a bit of juggling needed!
Leave it to me to have another look, back after I have made my delayed morning coffee!
From long experience you will find it easier to ring me. I am on 01750 725420.
All sorted out in the phone call, I think.
Thank you for your support.
The gain would be halved 50/50 for tax purposes and both of you have an AEA and LR.
Then the HMRC cat appears to have jumped the right way!
It means thet the correct residence has been selected for entitlement to PRR.