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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 10279
Experience:  FCCA FCMA CGMA ACIS
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I have owned my own home which has always been my sole

Customer Question

Hi
JA: Hello. How can I help?
Customer: I have owned my own home which has always been my sole residence since 1987.I inherited some money in 2016 and my new partner and I decided to buy a house to renovate. We were living between my main home and the renovation project since June 2016 as sometimes it was just easier to stay on site. During this time I let my home out periodically on Airbnb. I moved back to my main home permanently in February 2020.
JA: Have you talked to a tax professional about this?
Customer: After a lot of thinking I decide to sell it and buy myself a smaller place. I sold it in April 2020 and sold it straight away . I have not talked to a professional but have just received a message from HMRC . Surely I don't need to pay capital gains on my home, I need advise
JA: What are the assets or property for this capital gain?
Customer: What does that mean
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: No I bought it in 1987 and lived there all that time . It has always been my family home.
Submitted: 20 days ago.
Category: Tax
Expert:  bigduckontax replied 20 days ago.

Unfortunately you do, to reflect the periods it was let out against the overall ownership time.

Customer: replied 20 days ago.
How does that get worked out
Customer: replied 20 days ago.
It’s easier for me to do it via message as I am disabled
Expert:  bigduckontax replied 20 days ago.

Take the full ownership time in months (A). Take the let time ditto less the last 9 months of ownership when you are deemed to be in residence even if this is not the case (B). Now express B as a percentage of A and that will be the proportion of the gain exposed to Capital Gains Tax (CGT) which will be levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of disposal. You nave a non cumulative Annual Exempt Amount (A)A) of 12.3K to offset any gain.

Customer: replied 20 days ago.
Can you tell me that in simple terms please . Sorry I don’t understand
Expert:  bigduckontax replied 20 days ago.

I have shown you how to calculate the CGT payable, if any.

Customer: replied 20 days ago.
I don’t understand what express b as a percentage of A means amongst other things.
Customer: replied 20 days ago.
Also as I only let it for days at a time between living there do I add up all the days and convert them into months
Expert:  bigduckontax replied 20 days ago.

Correct.

Customer: replied 20 days ago.
I don’t understand what express b as a percentage of A means amongst other things. Is there anyway you can explain it in simpler terms for me.
Expert:  bigduckontax replied 20 days ago.

Put the A / B figure and multiply by 100. That will give you the percentage.

Customer: replied 20 days ago.
When you say pout the A / B figure do you mean divide it and then multiply? If not what do I do ?
Customer: replied 20 days ago.
Sorry when you say put the A/ B figure and multiply by 100. What does that mean ?
Expert:  bigduckontax replied 20 days ago.

Exactly what it says basic school arithmetic. I was taught it when i was 6.

Customer: replied 20 days ago.
Sorry I have a brain injury due to an accident so I cannot remember a lot of what I was taught but am learning again. This is why I cannot understand.
Expert:  bigduckontax replied 20 days ago.

I can only suggest that you gat a neighbour or friend to do this calculation for you.