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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 6102
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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I live overseas with my wife and we own two buy to let

Customer Question

I live overseas with my wife and we own two buy to let properties in the UK which we would like to sell. I would like to know the best way to do this and reduce our capital gains tax.
JA: What are the assets or property for this capital gain?
Customer: two buy to let properties
JA: Anything else you want the Accountant to know before I connect you?
Customer: My wife has sole ownership of one house and we have joint ownership of the second house.
Submitted: 12 days ago.
Category: Tax
Expert:  taxadvisor.uk replied 12 days ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Expert:  taxadvisor.uk replied 12 days ago.

Thank you for your question.

Please clarify

- how long have you had the properties .. date of purchase

- likely gain

- any capital improvements during period of ownership

- did you ever live in the property as main residence

Many thanks

Customer: replied 12 days ago.
property one was purchased on August 2013 for 205,000 and is now valued at 275000 we have never lived in the property and always lived abroad. Property two was bought in 2001 for 60000 and is valued at 125000. No improvements and no living in the property. We will not be returning to the UK until after both properties are sold. We will be using the money raised from the two properties to purchase a new property.
Expert:  taxadvisor.uk replied 12 days ago.

Thank you for your reply.

You should rebase the cost of the property to market value at 6 Apr 2015. This would take away a big chuck of the gain, certainly in the case of property purchased in 2001.

As there are no improvements to consider, you would deduct costs associated with buying and selling the property from the gain and the rest would be chargeable to CGT. You would claim gains allowance (this tax year £12,000 per owner) from the gain and the rest would attract CGT. CGT rates at 18%, 28% or a combination of both depending on your total UK income including the gain.

More information on changes to CGT on UK property for Non-Residents is covered here

https://www.smithcooper.co.uk/news-insights/changes-to-capital-gains-tax-on-property-disposals/

My aim is to give you a professional service. I hope this is helpful and answers your question.

Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave JA today. If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Customer: replied 12 days ago.
Is the Capital Gains Allowance of 12000 per owner additional to my personal tax allowance and can I use them both in one tax year?
Expert:  taxadvisor.uk replied 12 days ago.

Thank you for your reply.

Personal allowance is for income tax purposes and gains allowance is to cover capital gains in the tax year. You can't use both against the capital gain, I'm afraid.

I hope this is helpful and answers your question.

If there are no more issues, I will appreciate if you would kindly rate my service by selecting the 5 stars at the top of the screen before you leave, to ensure I get credited for it by Just Answer today.

Customer: replied 12 days ago.
Sorry, I didn't make myself clear, What I meant was will the income tax deducted from profits made by the houses rental during the tax year 2019 also reduce the Capital Gains Tax Allowance or are they separate?
Expert:  taxadvisor.uk replied 12 days ago.

Thank you for your reply.

They are separate taxes. Income tax implications on rental profit would not reduce your gains allowance.

I hope this is helpful and answers your question.

Expert:  taxadvisor.uk replied 12 days ago.

Hi there

Just checking to see if you need more clarification/information or have I answered your question.

If there are no more issues, I will appreciate if you would kindly rate my service by selecting the 5 stars at the top of the screen before you leave, to ensure I get credited for it by Just Answer today.

Many thanks