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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 7504
Experience:  FCCA FCMA CGMA ACIS
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We had a conversation in the past and I am now getting ready

Customer Question

Hi there, we had a conversation in the past and I am now getting ready my paperwork for my tax return after I sold my buy to let property in February 2019.
I am not sure how it works the 40k allowance if I was only living in the flat for a small period of time (maybe one month) during the refurbishments.
Also this was my only property, I had to live in a different place with my family.
Do you have any suggestion for when I submit my documentation for the tax return? Or are you able to do a tax return form me and at what price?thank you very much
Submitted: 6 days ago.
Category: Tax
Expert:  bigduckontax replied 6 days ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help ypu with your question. Just Answer protocol does not permit me to do external work for customers.

 

You are liable to Capital Gains Tax (CGT) for any gain made on the sale less your non cumulative Annual Exempt Amount (AEA), currently 12K. This will be taxed at 18% or 28% depending on your income including the gain in the tax year of sale. You can declare this gain in your 19/20 self assessment tax return.

 

 

 

 

Customer: replied 6 days ago.
Hi this is very different from what you told me in the past, the property was sold in february 2019. Are you able to see my past question?
Expert:  bigduckontax replied 6 days ago.

I am confused, my guidance would have been the same.

Customer: replied 6 days ago.
Please see the previous conversation:



capital gain tax
JA: What are the assets or property for this capital gain?
Customer: property
JA: Anything else you want the Accountant to know before I connect you?
Customer: no
bigduckontax Tax Professional
Hello, I am one of the experts on Just An swer and pleased to be able to help you with your question.

What is your exact Capital Gains Tax (CGT) question, please?

UK - I purchased a property in 2014 with my wife for 229950 and I just sold the same property for 309950 in 2019. This was a buy to let investment and both myself and my wife did tax return every year. I am not sure if correct we probably need to pay capital gain tax.
We are both employed full time and I would like to make sure I can use all the relevant tax allowances and ISA accounts to avoid a large capital gain tax bill. Could you please suggest the best possible scenario?
thank you
bigduckontax Tax Professional
You do indeed, CGT is payable on the gain made on sale. The gain is the difference between the acquisition price plus costs plus improvements and the net selling price. That would be half each. What is the position, please? ISA accounts do not come into the equation at all.

we both earn annual salary of 50k circa and the sale of the property was just one week ago. the CGT is on 80k (split between two of us) minus all the legal and other costs. Is any step to take now before the end of the tax year? this will be my last self assessment tax return because I don't have any other buy to let investment. If ISA accounts don't come into the equation, is there any other efficient way to reduce the large tax bill?
bigduckontax Tax Professional
80K gain is 40K each. Now knock off your individual non-cumulative Annual Exempt Amounts (AEA) of 11.7K leaves 28.3K. You now have Lettings Relief (LR) up to 40K available which will mop up any gain so no CGT to pay. Simple, as the meerkat in the TV Advert would say!

I do hope that I have been able to set your mind at rest on this matter.

That would be great!! I really hope that this is the case! Thank you!
Do I need to provide all these info during my tax return self assessment or I need to do something else with HMRC revenue? Thank you
bigduckontax Tax Professional
No, you merely claim when you self assess. Be sure to have supporting evidence available in the unlikely event of an HMRC inquiry.

Please be so kind as to rate me before you leave the Just Answer site.

Thank you Bigduck! Can I also ask, is that based on the Capital gain tax only or our annual salary is making an impact example 50K salary + 40K CGT? thank you!
bigduckontax Tax Professional
CGT is levied at two rates, 18% and 28% depending on individuals' salaries including the gain in the tax year of disposal. However, as I have explained, there will be no CGT payable in the scenario set out by you.

Ok thank you
bigduckontax Tax Professional
Delighted to have been of assistance.

Please be so kind as to rate me before you leave the Just Answer site.

bigduckontax Tax Professional
Thank you for yur support.

Perfect for now is fine, thank you. Rated Excellent!
bigduckontax Tax Professional
Pleased to have been able to help.

sorry just one more question, I was reading here that buy to let property don't get letting relief. I have been in the property for only few weeks before renting it out and this is my only property. Sorry but I just want to be sure 100%
http://www.stevenglicher.co.uk…
https://www.informaccounting.c…
bigduckontax Tax Professional
Here is the guidance from Listentotaxman.com:

'Letting relief may also be available to Buy-To-Let Landlords, in addition to PPR relief, on the condition that the property has, at some time, been let as residential accommodation, and a chargeable gain arises by virtue of the letting period.'

LR is abolished post 2020.
Expert:  bigduckontax replied 6 days ago.

I told you what the gain would be and how the system would remove the CGT liability. Your latest question set different parameters,hence the difference in my reply.

Customer: replied 6 days ago.
I gave you my scenario and you said that with my scenario I would not have liability for cgt which is probably not correct and now, is to late to make any arrangements to avoid such a big bill. Do you realise this?
Expert:  bigduckontax replied 6 days ago.

I can only respond the the parameters in the question at the time.

Customer: replied 6 days ago.
Please see our previous conversation which I have also enclosed here. At that time few months ago I have explained my position and you have clearly stated that with my scenario i am not liable for capital gain tax which is not correct.
My accountant is now telling me that this is not correct. I paid to ask a question today becaus I have to tell you and I hope you can help me somehow, otherwise you just advised me very wrongly and I will have to pay about 16k worth of tax!
Expert:  bigduckontax replied 6 days ago.

It was correct under the parameters you provided at the time. Since then you have changed your position hence the different answer.

Customer: replied 6 days ago.
No the parameters are the same. Nothing has changed. I am still talking about a tax return for 2018/2019
Expert:  bigduckontax replied 5 days ago.

Maybe, but under different circumstances.

Customer: replied 5 days ago.
Scenario and circumstances are the same! You gave me a completely wrong piece of information and I was reassured by an expert like you!!(see my different converter has in march last year).
Expert:  bigduckontax replied 5 days ago.

I do not agree.