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ChatterBank0 min ago
CGT on a second property I used to live in.
3 Answers
Hi all,
I need some help on calculating CGT on a second property which I used to live in, details follow.
Purchased property in Jan 1989
Moved out of property in 1996 to work abroad
This was my habitual residence.
Returned to UK in 2001
Purchased my my now habitual residence 2004
Moved in to my now habitual residence 2005
The property in question was the only property I owned between 1989 and 2004. I lived with my parents and in rented accommodation between 2001 and 2005.
I am single and therefore would not be able to get addition relief / cut CGT due to having a spouse.
Does taper relief still apply and if so for what period?
The property in question cost £52,000. If I was to sell it for £190,000 what should I expect to pay the tax man?
Hope this makes sense.
I need some help on calculating CGT on a second property which I used to live in, details follow.
Purchased property in Jan 1989
Moved out of property in 1996 to work abroad
This was my habitual residence.
Returned to UK in 2001
Purchased my my now habitual residence 2004
Moved in to my now habitual residence 2005
The property in question was the only property I owned between 1989 and 2004. I lived with my parents and in rented accommodation between 2001 and 2005.
I am single and therefore would not be able to get addition relief / cut CGT due to having a spouse.
Does taper relief still apply and if so for what period?
The property in question cost £52,000. If I was to sell it for £190,000 what should I expect to pay the tax man?
Hope this makes sense.
Answers
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I'm afraid that I'm not offering to do all the donkey work for you on this - someone like Factor30 may think differently. What I will tell you is that you appear to be liable for CGT on the property in respect of the period since 1996 until whenever you sell it.
The second important reference document for you is this one - which gives you the proper HMRC answers to your questions but in summary, taper relief was withdrawn in 2008 and replaced by a flat rate CGT of 18% on the gain, but this was fiddled with again in the 2010 Finance Bill such that a higher marginal rate of 28% was made payable on gains above the annual 'personal CGT allowance (about £10k)' plus the limit for higher rate personal income tax (about £38k). This was to ensure those mere mortals that pay higher rate income tax would also pay a higher rate of CGT on their gains.
http://www.hmrc.gov.u...pital-gains-intro.pdf
What I don't know is how you 'fix' a valuation of the property as at 1996 when it ceased to be your principal private residence (and hence liable to CGT if it increased in value after that date). Someone else maybe knows that.
The second important reference document for you is this one - which gives you the proper HMRC answers to your questions but in summary, taper relief was withdrawn in 2008 and replaced by a flat rate CGT of 18% on the gain, but this was fiddled with again in the 2010 Finance Bill such that a higher marginal rate of 28% was made payable on gains above the annual 'personal CGT allowance (about £10k)' plus the limit for higher rate personal income tax (about £38k). This was to ensure those mere mortals that pay higher rate income tax would also pay a higher rate of CGT on their gains.
http://www.hmrc.gov.u...pital-gains-intro.pdf
What I don't know is how you 'fix' a valuation of the property as at 1996 when it ceased to be your principal private residence (and hence liable to CGT if it increased in value after that date). Someone else maybe knows that.
1 to 3 of 3
