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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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I bought the first 50% of a shared ownership flat in 2003

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I bought the first 50% of a shared ownership flat in 2003 and then in 2005 bought the other 50% and immediately started renting it out. I sold it a month ago and now need to pay capital gains tax. How do I record the fact that the flat was bought in two chunks on the HMRC online form for reporting a sale for Capital Gains? Thanks
JA: What are the assets or property for this capital gain?
Customer: A shared ownership flat, please see earlier comment. Thanks
JA: Anything else you want the Accountant to know before I connect you?
Customer: No
Customer: replied 10 days ago.
I bought the first 50% of a shared ownership flat in 2003 (£76k) and then in 2005 bought the other 50% (£80k) and immediately started renting it out. I sold it a month ago (£257k) and now need to pay capital gains tax. How do I record the fact that the flat was bought in two chunks on the HMRC online form for reporting a sale for Capital Gains?

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

Thank you for your question.

When computing gain/loss you take total purchase price as your baseline. In your scenario total allowable cost against sale proceeds would be (76+80) £156k. You don't report puchases separately but as one total.

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

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 10 days ago.
Thanks, ***** ***** should I record as the purchase date (I can only record one date). The initial date of 2003 or the date I purchased the remainder, 2005? Also can I deduct the cost of improvements I made in 2003 (prior to renting the flat out in 2005)? Thanks

Thank for your reply.

Put 2003 as date of purchase. cost of improvements of a capital nature are deductible, so are costs associated with buying and selling the property aginst the overall gain.

I hope this is helpful and answers your question.

taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 10 days ago.
Hi, does it matter if the improvements were made before the flat was rented out? Thanks

Improvements of a capital nature (to enhance the value of property) can be anytime during period of ownership.

I hope this is helpful.

Customer: replied 10 days ago.
Thanks. That is very helpful. Can I just check that you are aware this is UK tax that we’re talking about? I only mention it because I see that this service covers a lot of different countries tax systems.
Customer: replied 10 days ago.
Hi, also, can I claim for the legal fees and stamp duty paid out to purchase the flat initially? Thanks, Mark

Thanks for your reply, Mark.

I am fully aware that you are enquiring about UK tax. I am UK based expert.

You can claim for legal fees and stamp duty etc paid when you bought the flat and also agents commission and legal fees when it was sold.

I hope this is helpful and answers your question. If there are no other issues I will appreciate if we could regard this question as been answered/accepted.

Many thanks