How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 10270
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Have just sold our cottage in Wales. Can I use BOTH my own

This answer was rated:

Have just sold our cottage in Wales. Can I use BOTH my own and wife's allowance to help pay the tax bill
JA: For which tax year do you need help?
Customer: Sold in March so it would be 2020-21
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: Bought the cottage in 2004 for £150000, Sold last year fro £230000. Fees & improvements over the 17 years (new windows ,kitchen bathroom etc.) £30000 Capital gains (18%) therefore on £50,000 less allowances. Mine and my wife's as the property was in joint names ?

Gain is 230K - 150K - 30K = 50K, that is 25K each. Now knock of individuals' non cumulative Annual Exempt Amount (AEA), currently 12.3K, leaves 12.7K exposed to the tax at 18%or 28% or a combination of the two rates depending on he individuals' income including the gain in the tax year of disposal. A worst case scenario would be a tax bill of a tad over 3.5K.

bigduckontax and 2 other Tax Specialists are ready to help you
Customer: replied 1 month ago.
Excellent !! How do I let the taxman know? I self assess so how can I tell them that , I am liable for half of the bill and therefore use my allowance (is this an automatic calculation/deduction ?). But my wife currently doesn't self assess so how do I let the Tax people know what she should pay and therefore enable her to use her allowance.?

You must advise HMRC within a month of the disposal date and pay the tax due, if any.