CGT liability

  • Filter
  • Time
  • Show
Clear All
new posts

    CGT liability

    I have a second property which I bought with my husband in August 2011. I started letting it after 1 month of ownership, during which time I notified HMRC that it was my primary residence.
    I paid £600k for it. It is now worth £900k. If I sell now ie November what is my Capital Gains liability assuming we're both already higher rate tax payers?

    Is it: Total gain = 300
    76 months - 19 = 57
    300/76 x 57 = 225
    225 - (2 x 40k private lettings relief) = 145
    145 x 0.28 = £40,600

    It depends on whether you had intended to occupy the property as your permanent residence rather than doing it to minimise the tax payable. HMRC might disallow a PPR claim if they feel you never intended the occupation to be permanent. Assuming they allow it, you have forgotten your personal annual allowances of £11,300.


      How can it be your main residence if you let the property after only one month from purchase.? Have you reported the income from subletting since 2011?

      If property was registered under joint ownership, each owner has 50% share of the capital gain = £150K .

      The personal capital gains allowance at £11K may be claimed , so taxable gain on £150K-£11K = £139K .

      Tax payable on taxable capital gain of £139K @ 28% = £38K approx.


        All the rent has been declared! My husband lost his job at the same time as we purchased it - hence the change of plan.


          What's meant to happen is that HMRC cross refer your tax data and will see that you have been decaring rental income for your "main" residence.
          In reality, I doubt that would happen.

          Which is a shame - because, on the face of what's been posted, I imagine no CGT will be paid.
          Cyinic that I am.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


          Latest Activity


          • Reply to Let Property Campaign.
            by theartfullodger

            Well done HMRC..

            None of my business, and obviously not in anyway a criticism of anybody, but If I had had a friend who I found out had been fiddling tax for 16 years they'd no longer be my friend.
            18-09-2021, 11:46 AM
          • Let Property Campaign.
            by armour
            Hi all,

            A friend of mine has been renting out a flat since 2004 and has not declared any of the income to HMRC in all that time.

            She wants to come clean and pay the accumulated income tax she owes by making a non-prompted disclosure using the Let Property Campaign system....
            13-09-2021, 13:45 PM
          • Reply to Let Property Campaign.
            by armour
            Fair enough. Thanks for your advice. It is on cash basis.

            I guess it would only save her 50 odd quid anyway, maybe less than £80 once the fine and interest is added. I guess she'll have to swallow that.
            Once again, thanks JP and Gordon for your help.
            18-09-2021, 09:07 AM
          • Reply to Overseas Landlords
            by Santa Fe
            Boletus, thank you.
            17-09-2021, 18:37 PM
          • Overseas Landlords
            by Santa Fe
            I'm from UK but live overseas and recently discovered that I should be registered as an overseas landlord. I've done a bit of research on what it involves and it seems a bit of a headache - tenants have to fill out forms and pay tax from their rent direct to HMRC. If anyone here is registered as an...
            16-09-2021, 16:44 PM
          • Reply to Let Property Campaign.
            by jpkeates
            armour - Sorry, I don't know.
            It might depend on whether you're accounting on the cash basis (in which case I suspect not) or the accrual basis (when it's possible).

            But it's not something I ever got involved with when the W&T allowance existed, and all of the practical guidance...
            17-09-2021, 11:43 AM
          • Reply to Let Property Campaign.
            by armour
            Thanks JP, that's clear. I'll put the bathroom in with the income tax then. I guess it's much of a muchness anyway as the associated reduction in interest and fine will probably equal out.

            I have one last question, if you'd be so kind.

            During the year she had to make the eviction,...
            17-09-2021, 09:18 AM
          • Reply to Overseas Landlords
            by boletus
            You fill out this form requesting to have rental income without deduction of tax and pay it yourself;

            16-09-2021, 17:26 PM
          • Reply to Let Property Campaign.
            by jpkeates
            The 10% was for furnishings, so built in stuff should be ok to claim.
            The bathroom refurb depends on what was done if it was simply a replacement, it's maintenance, if it was a significant upgrade, it's likely to be part capital/part maintenance.
            If it's a new bathroom, it's probably ca...
            16-09-2021, 08:37 AM
          • Reply to Let Property Campaign.
            by armour
            Seems pretty clear there JP. I'll go ahead and alter my calculations

            One more thing, My friend had a bathroom refurb and a built in oven and hob replaced during the period when the flat was let furnished. I'm pretty sure that these costs can be detucted in addition to the 10% W&T, but...
            15-09-2021, 14:06 PM