CGT advice please.h

[Landlubber]

Hi. Selling a BTL and faced with the inevitable i was wondering just how easy is it to use HMH"s website to deal with it, any curveball i need to know about, what documents do I need ready to hand?

Thanks in advance

[Ham_and_Jam]

Landlubber said:

Hi. Selling a BTL and faced with the inevitable i was wondering just how easy is it to use HMH"s website to deal with it, any curveball i need to know about, what documents do I need ready to hand?

Thanks in advance

Very easy, did it last month.

You need original purchase info. Purchase price and associated costs (estate agent & conveyancing). Same for the sale. You can deduct these from the CGT liability.

Also you can deduct any costs of improvements to the property, but these must not have already been used for any taxable deductions on your annual returns.

You get £3k per year personal CGT allowance. If it s jointly owned you can use 2 x £3k. Each partner claims separately and puts 50% of the value of the property and 50% of all the expenses etc.

You need to set up an account on the HMRC website (easy if you ve got a government gateway registration) -

https://www.gov.uk/report-and-pay-your-capital-gai...

I found it really simple, took about 30 mins, but was double checking everything.

Ask away if you have any questions, its still fairly fresh in my mind.

Edited by Ham_and_Jam on Monday 24th August 20:34

[Ham_and_Jam]

Forgot you say, you can upload evidence. I didn’t bother as mine was fairly simple and wasn’t for a great deal of money.

[Landlubber]

Ham_and_Jam said:

Landlubber said:

Hi. Selling a BTL and faced with the inevitable i was wondering just how easy is it to use HMH"s website to deal with it, any curveball i need to know about, what documents do I need ready to hand?

Thanks in advance

Very easy, did it last month.

You need original purchase info. Purchase price and associated costs (estate agent & conveyancing). Same for the sale. You can deduct these from the CGT liability.

Also you can deduct any costs of improvements to the property, but these must not have already been used for any taxable deductions on your annual returns.

You get £3k per year personal CGT allowance. If it s jointly owned you can use 2 x £3k. Each partner claims separately and puts 50% of the value of the property and 50% of all the expenses etc.

You need to set up an account on the HMRC website (easy if you ve got a government gateway registration) -

https://www.gov.uk/report-and-pay-your-capital-gai...

I found it really simple, took about 30 mins, but was double checking everything.

Ask away if you have any questions, its still fairly fresh in my mind.

Edited by Ham_and_Jam on Monday 24th August 20:34

Thanks, I will. Ta.

[Landlubber]

Ham_and_Jam said:

Landlubber said:

Hi. Selling a BTL and faced with the inevitable i was wondering just how easy is it to use HMH"s website to deal with it, any curveball i need to know about, what documents do I need ready to hand?

Thanks in advance

Very easy, did it last month.

You need original purchase info. Purchase price and associated costs (estate agent & conveyancing). Same for the sale. You can deduct these from the CGT liability.

Also you can deduct any costs of improvements to the property, but these must not have already been used for any taxable deductions on your annual returns.

You get £3k per year personal CGT allowance. If it s jointly owned you can use 2 x £3k. Each partner claims separately and puts 50% of the value of the property and 50% of all the expenses etc.

You need to set up an account on the HMRC website (easy if you ve got a government gateway registration) -

https://www.gov.uk/report-and-pay-your-capital-gai...

I found it really simple, took about 30 mins, but was double checking everything.

Ask away if you have any questions, its still fairly fresh in my mind.

Edited by Ham_and_Jam on Monday 24th August 20:34

So, it's £3k per person per year? Since we bought the house?

[Landlubber]

Ham_and_Jam said:

Landlubber said:

Hi. Selling a BTL and faced with the inevitable i was wondering just how easy is it to use HMH"s website to deal with it, any curveball i need to know about, what documents do I need ready to hand?

Thanks in advance

Very easy, did it last month.

You need original purchase info. Purchase price and associated costs (estate agent & conveyancing). Same for the sale. You can deduct these from the CGT liability.

Also you can deduct any costs of improvements to the property, but these must not have already been used for any taxable deductions on your annual returns.

You get £3k per year personal CGT allowance. If it s jointly owned you can use 2 x £3k. Each partner claims separately and puts 50% of the value of the property and 50% of all the expenses etc.

You need to set up an account on the HMRC website (easy if you ve got a government gateway registration) -

https://www.gov.uk/report-and-pay-your-capital-gai...

I found it really simple, took about 30 mins, but was double checking everything.

Ask away if you have any questions, its still fairly fresh in my mind.

Edited by Ham_and_Jam on Monday 24th August 20:34

So, it's £3k per person per year? Since we bought the house?

[silentbrown]

Landlubber said:

So, it's £3k per person per year? Since we bought the house?

No.

It's at the point you 'realise' the gain (i.e when you sell). If you have two BTLs you can sell one on 4th April and use your £3K allowance to reduce tax, then sell the second on 6th April and use the following years allowance.

It makes no difference how long you've held the asset - which is one thing that I really think needs changing in the CGT regime.

[Landlubber]

Got it, thanks, I thought that was the case.

[Ham_and_Jam]

Landlubber said:

Ham_and_Jam said:

Landlubber said:

Hi. Selling a BTL and faced with the inevitable i was wondering just how easy is it to use HMH"s website to deal with it, any curveball i need to know about, what documents do I need ready to hand?

Thanks in advance

Very easy, did it last month.

You need original purchase info. Purchase price and associated costs (estate agent & conveyancing). Same for the sale. You can deduct these from the CGT liability.

Also you can deduct any costs of improvements to the property, but these must not have already been used for any taxable deductions on your annual returns.

You get £3k per year personal CGT allowance. If it s jointly owned you can use 2 x £3k. Each partner claims separately and puts 50% of the value of the property and 50% of all the expenses etc.

You need to set up an account on the HMRC website (easy if you ve got a government gateway registration) -

https://www.gov.uk/report-and-pay-your-capital-gai...

I found it really simple, took about 30 mins, but was double checking everything.

Ask away if you have any questions, its still fairly fresh in my mind.

Edited by Ham_and_Jam on Monday 24th August 20:34

So, it's £3k per person per year? Since we bought the house?

If only!

No you get a personal allowance of £3k / year, its not cumulative and resets each tax year if unused.

As I said, if the property is owned by more than one person you can use each personal allowance against their share of the CG liability. For example:

£100,000 purchase
£200,000 sale
£100,000 Capital gain

£5,000 purchase costs
£5,000 sale costs
£10,000 improvements

Net £80,000 CG liability

After £3k allowance(s)=
One owner = £77,000 CG liability
Two owners = £37,000 each

You then pay the CG tax based on your income tax rate:

Standard rate = 18%
Higher rate = 24%

[Landlubber]

Yeah, as i thought, unfortunately all the improvements have been through the books already ans as we didn't use an estate agent to buy thetes not a whole lot we can claim back. Darn it.

[Ham_and_Jam]

Landlubber said:

Yeah, as i thought, unfortunately all the improvements have been through the books already ans as we didn't use an estate agent to buy thetes not a whole lot we can claim back. Darn it.

You can put conveyancing costs through, they are usually a few grand on both purchase and sale.

[bennno]

Ham_and_Jam said:

If only!

No you get a personal allowance of £3k / year, its not cumulative and resets each tax year if unused.

As I said, if the property is owned by more than one person you can use each personal allowance against their share of the CG liability. For example:

£100,000 purchase
£200,000 sale
£100,000 Capital gain

£5,000 purchase costs
£5,000 sale costs
£10,000 improvements

Net £80,000 CG liability

After £3k allowance(s)=
One owner = £77,000 CG liability
Two owners = £37,000 each

You then pay the CG tax based on your income tax rate:

Standard rate = 18%
Higher rate = 24%

Be careful with ‘improvements’ - only extensions or additions may be counted. Eg add a bathroom, not refurbish one etc.

[Landlubber]

Ham_and_Jam said:

Landlubber said:

Yeah, as i thought, unfortunately all the improvements have been through the books already ans as we didn't use an estate agent to buy thetes not a whole lot we can claim back. Darn it.

You can put conveyancing costs through, they are usually a few grand on both purchase and sale.

Yes, unfortunately perhaps when we bought it 26years ago that was done by a friend of a friend at 'mates rates. So basically pennies.

[Eric Mc]

Landlubber said:

So, it's £3k per person per year? Since we bought the house?

If the property is jointly owned, the TWO individuals must register online SEPARATELY and each return their share of the gain on their respective submissions.

In other words, all of the numbers (purchase costs, enhancement costs, allowable costs, proceeds on sale etc) must be split 50/50 and returned separately by each owner.

Once you know the completion date of the sale, you have 60 days to make the submission and PAY the resulting Capital Gains Tax (if any).

Calculating the actual liability is a bit more complicated than you might think.
The CGT amount due is not a stand alone calculation. You must also include in your calculations your other income from other sources (salaries, pensions, rental income, interest, self employed earnings etc) as the rate of CGT applicable to your share of the gain is based partly on your other income in the year. That is why you and the other owner might end up with different CGT amounts to pay even if your share of the gain is identical.

Also, if the gain is happening now, you are only part way through the tax year and you may not be 100% sure what your total "Other Income" is going to be for tax year 2026/27 - so you may have to amend your CGT calculations after the end of the tax year. You might have overpaid your CGT or underpaid it. The easiest way to do this is when you are completing your 2026/27 Self Assessment tax return.

If you underpaid your CGT HMRC will charge you interest.

[silentbrown]

Eric Mc said:

Also, if the gain is happening now, you are only part way through the tax year and you may not be 100% sure what your total "Other Income" is going to be for tax year 2026/27 - so you may have to amend your CGT calculations after the end of the tax year. You might have overpaid your CGT or underpaid it. The easiest way to do this is when you are completing your 2026/27 Self Assessment tax return.

If you underpaid your CGT HMRC will charge you interest.

Also, you may not know what other CGT gains/losses you're going to make in the tax year. It's very much an interim figure and any under/overpayment should get sorted in your SA return.

Have rental profits/losses been split between the joint owners each year or all assigned to one?

[Ham_and_Jam]

Eric Mc said:

If the property is jointly owned, the TWO individuals must register online SEPARATELY and each return their share of the gain on their respective submissions.

That s exactly what we did. I think once you start the online process it s fairly obvious thats what you do.

The form is pretty inflexible, so you can only input specific numbers it requests.

My OP

You get £3k per year personal CGT allowance. If it s jointly owned you can use 2 x £3k. Each partner claims separately and puts 50% of the value of the property and 50% of all the expenses etc.

Ham_and_Jam said:

Edited by Ham_and_Jam on Tuesday 25th August 09:50

Edited by Ham_and_Jam on Tuesday 25th August 09:51

[Wombat3]

Also print off and keep a record of all the figures you submit because you will need to resubmit them in your tax return for FY 26/27

[Eric Mc]

There is one major problem with submitting and paying taxes part way through a tax year.

The UK tax system is over 200 years old and fundamentally follows principles that were established in the early 19th century i.e. that a person's true tax liability can only be accurately calculated once the actual tax year has ended and the various income strands, expenses, allowances and tax relief claims for that specific to that tax year have been decided on and claimed.

Some of the claims and allowances that a person might want to make cannot be ascertained until the tax year is over and you can then assess what the best course of action is regarding these claims and allowances. If you make claims or declarations during a tax year you could end up wasting them and paying too much tax - or making inappropriate claims and paying too little tax.

In recent years, HMRC has started moving towards "in year" submissions and declarations for specific elements of a person's income. The problem is that when you are only part way through a tax year and performing these "in year" calculations you do not, and in many cases, cannot, know what the best options are.

That is why you still have to review everything again once the tax year is over and you can then look back and review the situation.

[Landlubber]

Great guys, thanks. One or two things of interest for me, property is owned by wife who has a salary and savings (either tax free or covered by £1k interest rule, nothing earned from rental in this tax year. So providing we dont hit any bumps in the road it should be relatively simple (if expensive).

So thanks again.

[Eric Mc]

Landlubber said:

Great guys, thanks. One or two things of interest for me, property is owned by wife who has a salary and savings (either tax free or covered by £1k interest rule, nothing earned from rental in this tax year. So providing we dont hit any bumps in the road it should be relatively simple (if expensive).

So thanks again.

I'm now totally confused.

Who is making the CGT return - you, your wife or both of you?

If the property is owned solely by your wife, then it is entirely her affair and nothing to do with you.

As a matter of interest, was the property ever your wife's main/only residence?