Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, I am one of the experts on Just Answer and pleased to be ablr to help you with your question.
Where do you live since you left in 2009, in your own house or in rented accommodation?
You will be liable for Capital Gains Tax (CGT) on the gain made on sale, but only for a proportion. The time spent between 2005 and 2009 plus the last 18 months of ownershi, when you are deemed to be in residence even if this is not the case, reduces your exposure to the tax.
Your total ownership time is 13 years. occupation time 5.5 years. 13 - 5.5 = 7.5 so 7.5 / 13 say 58% of the gain will be taxed. The gain is 28.3 - 16.3 = 12K and 58% of that is say 7K. As you have an Annual Exempt Amount (AEA) of 11.7K there will be no tax due on disposal, better than a poke in the eye with the proverbial sharp stick.
i do hope that I have been ab;e to set your mind at rest on this matter..
Does not make a jot of difference as no CGT is payable.
Yes, sorry my error, 293K - 163K - 120K - 11.7K = 108.3K which would be taxed at 28% so a tad over 30.3K tax due. You question mentions 'we' so if this was held jointly then the exposure would be half each, say 54K, tax 15.1K making 30.2K total, a tiny saving.
So you and you daughter own the house being sold, in what proportion?
So the CGT bill will be 30.3K.
The gift to your daughter will create a Potentially Exempt Transfer (PET) in your Inheritance Tax (IHT) affairs. PETs run off at a taper over 7 years and in the event of your death within this period will be added back to your estate for IHT purposes. PETs are the first to suffer IHT and if your estate is insufficient to meet the tax on the PET then tha liability cascades down to the beneficiary for immediate payment.
Gain is 120K of which 58% is taxable ie 69.6 less AEA of 11.7 is 57.9 @ 28% = a tad over 16K of tax. I forgot to knock off the occupation time, sorry, it is getting late.
Usually, I showed you how it can happen.