disposing of joint property and tax return
Discussion
last year my wife and I sold a flat that we had been renting out for a few years. It was never our primary residence (apart from a few weeks before we went over seas). The monies from the flat has been put into our current, one and only residence which we purchased after the flat deal.
Whilst it has been let, we have detailed income from this on our self assessment returns, simply splitting the income and expenditure in half (probably not the most efficient as she hasn't worked for the last few years - but quick and easy to work out) We sold the place at the end of september last year, and so I am looking at the self assessment sheets relating to disposal of property. We sold the place for the going rate, but for less than it's purchase price so I dont suppose we will be troubled by capital gains.
whats the best way to complete the forms, I was going to deal with the 6 months rental income in the way that I normally do, but with regards the disposal, should I complete 1 SA108 and include in my tax return, or one in each of our returns showing 50% each??
any helpful tips before I attempt to speak to the tax office?
Whilst it has been let, we have detailed income from this on our self assessment returns, simply splitting the income and expenditure in half (probably not the most efficient as she hasn't worked for the last few years - but quick and easy to work out) We sold the place at the end of september last year, and so I am looking at the self assessment sheets relating to disposal of property. We sold the place for the going rate, but for less than it's purchase price so I dont suppose we will be troubled by capital gains.
whats the best way to complete the forms, I was going to deal with the 6 months rental income in the way that I normally do, but with regards the disposal, should I complete 1 SA108 and include in my tax return, or one in each of our returns showing 50% each??
any helpful tips before I attempt to speak to the tax office?
It's been treated as a 50/50 split all along so the correct way is to treat it as a 50/50 split regarding the Capital Gains Tax.
If there is genuinely no gain on the disposal, then there will be no Capital Gains Tax arising for either of you.
If the overall gain is less than £22,200, there will be still no tax arising as you each have a Capital Gains Tax allowance of £11,100 you can offset against your respective shares of the gain.
Based on what you have said I am assuming you know the essentials of calculating the overall gain or loss arising on disposal.
If there is genuinely no gain on the disposal, then there will be no Capital Gains Tax arising for either of you.
If the overall gain is less than £22,200, there will be still no tax arising as you each have a Capital Gains Tax allowance of £11,100 you can offset against your respective shares of the gain.
Based on what you have said I am assuming you know the essentials of calculating the overall gain or loss arising on disposal.
Thanks, Eric, that was my initial feeling,
i have had a good look at the calculations part of it, the flat sold for more than 20k less than the original purchase price so no capital gains to be seen! - probably not the best investment in the world - but it performed well in the letting market whilst we had it and kept us a foothold in the UK market whilst overseas
i have had a good look at the calculations part of it, the flat sold for more than 20k less than the original purchase price so no capital gains to be seen! - probably not the best investment in the world - but it performed well in the letting market whilst we had it and kept us a foothold in the UK market whilst overseas
Even if there was no taxable gain and no Capital Gains Tax arising, the numbers still have to be returned to HMRC on your respective self assessment forms.
The rental income details are returned as they would have been on previous forms but they wuill, of course, only show rental income and expenditure from 6 April 2016 up to the date the rental income ceased.
The rental income details are returned as they would have been on previous forms but they wuill, of course, only show rental income and expenditure from 6 April 2016 up to the date the rental income ceased.
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