Sold flat - self assessment query
Discussion
We are just about concluding the sale of a flat, that we have owned for 13 years, this has been rented out. We haven't had a mortgage on it for the last 10 years. Do I need to declare the sale on my self assessment next time around? the flat has sold for 20k less than its original purchase price, so I guess capital gains tax will not apply, and the cash liberated will allow us to buy a family home.
Can the loss in value of the flat be offset against any rental income this year?
Any advice gratefully received
Can the loss in value of the flat be offset against any rental income this year?
Any advice gratefully received
IIRC a Capital Gains Tax declaration is required if you have made gains of more than £11,100 or received proceeds of sale of more than £44,400. EricMc may be along shortly with better knowledge.
Anyway, it's always worth claiming a realised loss because it can be carried forward and set off against gains in the future.
Anyway, it's always worth claiming a realised loss because it can be carried forward and set off against gains in the future.
As Ozzie says, it's a Capital Gains Tax matter and therefore will need to be returned to HMRC as part of the 2016/17 Self Assessment tax return. I'm assuming the sale was completed after 5 April 2016.
The chargeable gain is essentially the difference between what you bought the flat for deducted from what you sold it for. However, the tax payable can be mitigated depending on whether any of the following apply -
was the flat ever your main residence?
was the flat jointly owned?
during your period of ownership, did you make any significant capital expenditure on the flat (referred to as Enhancement Expenditure in Capital Gains Tax legislation?
The chargeable gain is essentially the difference between what you bought the flat for deducted from what you sold it for. However, the tax payable can be mitigated depending on whether any of the following apply -
was the flat ever your main residence?
was the flat jointly owned?
during your period of ownership, did you make any significant capital expenditure on the flat (referred to as Enhancement Expenditure in Capital Gains Tax legislation?
He mentioned "loss of value" which I didn't automatically take meant he got less than what he bought it for. Perhaps he should clarify the situation.
To be honest, after 13 years of ownership I find it difficult to believe that the value went down over that period of time.
If he did indeed make a loss, he will still need to return the transaction if the sale proceeds received was greater than £44,400.
To be honest, after 13 years of ownership I find it difficult to believe that the value went down over that period of time.
If he did indeed make a loss, he will still need to return the transaction if the sale proceeds received was greater than £44,400.
Thanks for the input chaps, just to clarify the flat will be sold for 20k leas that original purchase price in 2003. It was one of the earlier phases of ipswich dock development, there is now a massive oversupply, depressing prices. We bought it to keep a foothold in the uk market whilst abroad, fortunatley it has rented out well so we are up on the overall deal
Definitely a loss then. You will still have to return the details on a Self Assessment - assuming the sale price was over £44,400 - but there will be no tax to pay.
Was it jointly owned?
If it was, both owners will need to complete their own self assessment return covering their share of the disposal.
Was it jointly owned?
If it was, both owners will need to complete their own self assessment return covering their share of the disposal.
Eric Mc said:
I have asked a couple of times, was the property jointly owned?
Ah yes forgot to mention, my wife and i own it jointly, so as you say we will each reflect the sale on self assessment (half each - both chunks will be over the 44k)Edited by sawman on Thursday 22 September 13:27
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