Discussion
Very quick question.
- I bought a BTL flat in 2007: for £210,000 - and spent about £15,000 on renovations
- I now want to sell it - 9 years on - for £337,000... will I owe any CGT?
It's been BTL since day one and I've never lived in it.
I have emailed my accountant but he's away for two days. Thank you
- I bought a BTL flat in 2007: for £210,000 - and spent about £15,000 on renovations
- I now want to sell it - 9 years on - for £337,000... will I owe any CGT?
It's been BTL since day one and I've never lived in it.
I have emailed my accountant but he's away for two days. Thank you
LDN said:
Thanks chaps.... one word: 'ouch'.
I guess I then also have to declare the profit on the sale on my self assessment... taxed twice based on one sale? One CGT and one on the profit on my self assessment?
Lovely.
You declare it as a capital gain on your self assessment.I guess I then also have to declare the profit on the sale on my self assessment... taxed twice based on one sale? One CGT and one on the profit on my self assessment?
Lovely.
So you pay CGT not income tax, so only one lot of tax.
If you've lived in a place but more than two years before sale date - is CGT owed on that sale?
Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
LDN said:
If you've lived in a place but more than two years before sale date - is CGT owed on that sale?
Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
Recent Telegraph article on a similar situation: http://www.telegraph.co.uk/tax/capital-gains/how-l...Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
Might be worth getting a new accountant if you don't trust their advice - I'm sure plenty of people on here have recommendations of good ones.
LDN said:
If you've lived in a place but more than two years before sale date - is CGT owed on that sale?
Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
How much has she made on it? She (currently) has 18 months after it was her main residence until it starts to become liable to CGT. So in her case, she has owned it for 12 years in total (144 months), and it became liable to CGT 6 months ago. Say she's made £100,000 profit on it after costs, take that gain and multiply it by 6/144, which in this example equals £4167. She has an annual exemption of £11100, so no CGT due.Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
LDN said:
If you've lived in a place but more than two years before sale date - is CGT owed on that sale?
Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
Depends on the numbers, but unlikely. Only 6 months would be chargeable. Take the total gain, divide by 1/24. If that's less than 40k, letting relief is likely to wipe out the gain. If it's more than 40k, she's an investment guru and can afford to pay CGT on it. Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
Alpinestars said:
Depends on the numbers, but unlikely. Only 6 months would be chargeable. Take the total gain, divide by 1/24. If that's less than 40k, letting relief is likely to wipe out the gain. If it's more than 40k, she's an investment guru and can afford to pay CGT on it.
This is correct. There is lettings relief as well before you even need to consider the CGT AE.LDN said:
If you've lived in a place but more than two years before sale date - is CGT owed on that sale?
Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
Sounds like you are making enough returns to seek proper advice. A good accountant should know all this stuff backwards and upside down.Related to my partner selling a flat she owns. She lived in it for ten years but the last two years she has had it as a BTL... accountant says no CGT owed... Google search throws up a million opinions, many of which say CGT is owed on a place unless you've lived in it within a certain period before sale date.
LDN said:
Thanks chaps.... one word: 'ouch'.
I guess I then also have to declare the profit on the sale on my self assessment... taxed twice based on one sale? One CGT and one on the profit on my self assessment?
Lovely.
Surely to goodness you were aware of the existence of Capital Gains Tax before you bought a significant capital asset?I guess I then also have to declare the profit on the sale on my self assessment... taxed twice based on one sale? One CGT and one on the profit on my self assessment?
Lovely.
The gain is calculated by deducting the cost of purchasing the property
PLUS any development costs you expended on the property over the time you have owned it
PLUS the ancillary costs of purchase (legal fees, stamp duty, search fees etc)
PLUS the ancillary costs of selling (legal fees, advertising, estate agent fees etc)
from the sale proceeds.
Every taxpayer receives a Capital Gains Tax annual allowance for each tax year. The allowance for 2016/17 is £11,100.
You deduct this from the sale proceeds as well.
What is left after deducting all the above is the Taxable Amount.
Capital Gains Tax is charged at either 18% (if you are a Basic Rate taxpayer) or 28% (if you are a Higher Rate taxpayer). For many Basic Rater taxpayers, the addition of the taxable gain is sufficient to push them into the Higher Rate tax bracket. So some, if not all, of the taxable gain will be taxed at 28% rather than 18%.
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