Capital Gains Tax !

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Capital Gains Tax !

    Ok you clever people , I could make this very long but I will try and keep it short , How do you no or find out if you have to pay this tax ? I have a few property,s and would like to sell the largest one but have been told if I'm not the payer of the bills I only have 18 months and then its not my main house and would be liable for 40% taxed on the profit ( which would be loads as we have had the house in our joint names for 23 years ( moved out 2 years ago ) I no its not black and white and for some strange reason no one seems to no the truth on this high property tax , Thank you for reading this and any fed back would be great .

    #2
    I'm am assuming this property you are selling was previously rented out, and therefore was not your main residence, if this is the case you will be liable to CGT, the exception is only for your main residence, if you can prove you lived there prior to selling it you could then get the relief of CGT on this.

    Comment


      #3
      Reading "no" as "know", and assuming you have copyright clearance.

      It is not a property tax; it might better be described as an investment tax. Also it is not 40%; the rate depends on your marginal rate of tax, and whether or not the gain is on residential property, but no rate is currently greater than 28%.

      The answer to the main question is that any investor is expected to keep proper records and submit proper tax returns. Given that, in London, most BtL landlords are aiming for a capital gain, all should have factored CGT in from the start of the business.

      The real question here is to the extent that you have exemption as the result of its being your main home. Whilst that exemption may still apply to you, it is not really intended for people with large portfolios. I think the aim is that it allows people to work away from home, or not sell their old home immediately, if selling proves difficult.

      Rather than try to summarise the rules and get them wrong, start here: https://www.gov.uk/tax-sell-home In particular I wonder if you actually bought as an investment, even though you lived in it, which might void the allowance.

      Comment


        #4
        Paying of (utility) bills has nothing whatsoever to do with ownership with respect to Capital gains.

        If you lived there for 23 years and rented it out for 2 years, GCT would almost certainly be zero.

        But you seem not to have lived there - or did you????. The amount of time you "get" is zero -- not sure where the 18month idea comes from..... that is only applicable if it was your primary and only residence.

        It is (mostly) black and white.

        Yes I generally know the truth.

        You need to describe the thing exactly to get to that truth.

        Comment


          #5
          Thanks for your replys , The house was our main living house until 2 years ago when we down sized ,we never rented the house out as tried to sell it but it fell threw a couple of times so no we never rented this house , Our tax records are all complete and up to date with the other propertys , We don't want to sell the house and then get a very lg CGT as you could imagine ,again thank you all for your valuable time .

          Comment


            #6
            Then your CGT bill will almost certainly be zero.

            Unless it is an extremely expensive property and increased in value by at least a million or so (given two basic CGT exemptions) -- if that is the case you will need to look at precise numbers.

            Can you prove it was your only or designated main residence for all of that period (minus 2 years)?

            Comment


              #7
              Thank you .

              Comment


                #8
                If you have lived in the property for 21 years out of 23 years , the tax office will give exemption to capital gains tax for 21 years + 18 months from date of moving out. So only the gain for last 6 months is taxable.

                If your capital gain over 23 years gives you £460,000 profit which is a gain of £20,000 per year. Your tax able gain for 6 months period is £10,000 . You have a capital gains allowance of £11,000 so there will be no tax to pay.

                Comment


                  #9
                  If the property never rented, it never became part of a property investment business, so the property never become an investment.
                  The rules in second property sales are fairly simple, and the actual answer will depend on where you actually lived and what, if anything, you told HMRC (about which was your main home for example).
                  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).

                  Comment

                  Latest Activity

                  Collapse

                  • Reply to S24 deduction of interest payment / Covid-19 Virus
                    by jpkeates
                    I don't think that many landlords will pay any more tax, it'll catch some, but I'd have thought for the majority of landlords it's tax neutral.
                    A small number of landlords will pay slightly more tax isn't much of a headline, though.

                    At the time as s24 has been introduced, the personal...
                    01-04-2020, 13:13 PM
                  • S24 deduction of interest payment / Covid-19 Virus
                    by Flashback1966
                    I am wondering if S24 tax changes are going to come and haunt landlords.

                    Under the tax changes landlords can't deduct interest payments in full. Individual Landlords have been paying more tax, then is fair.

                    You could end up with a situation where the tenant wont or can't...
                    01-04-2020, 08:06 AM
                  • Reply to Selling part share
                    by Bill31
                    Im sure the reservation relies on the person who made the gift.
                    If we was to sell the property and take our 50/50 share of the sale price would that release the gift with reservation if we then went on to buy our own property
                    01-04-2020, 12:27 PM
                  • Selling part share
                    by Bill31
                    5 years ago i gifted part of my property to my son as joint tenants. We lived in the property together. So its possibly a grob.

                    Now we want to go our separate ways. Could he buy my share out so he owns the whole house. And i use the money to buy elsewhere. Could this introduce a IHT or...
                    31-03-2020, 13:41 PM
                  • Reply to Selling part share
                    by jpkeates
                    The reservation will depend (as far as I can see) on who pays the running costs of the property.
                    If the running costs are split in line with the ownership, it's one thing, if the property is run as though it was the mother's house with her continuing to pay all the bills is another.
                    01-04-2020, 09:58 AM
                  • Reply to Selling part share
                    by AndrewDod
                    Well if CGT was not payable on the first slice it won't be on the second.

                    I don't see that you retained a benefit, but I can't find any case law to that effect. But if rent was payable it would have gone in both directions (you would have paid your son half the rent and he would have paid...
                    31-03-2020, 18:19 PM
                  • Reply to Selling part share
                    by Bill31
                    Interesting that it may not be a grob as we own it all together. But surely hmrc will view it as i retained a benefit.

                    Its our only main property i dnt think any cgt will be due. I was asking will cgt be due if i make another gift or sell my share to get my name of deeds?
                    I ask because...
                    31-03-2020, 17:35 PM
                  • Reply to Selling part share
                    by AndrewDod
                    Although they were BOTH living there and both owned it -- so the share gifted is probably not a GROB. It would be if only the OP was living there (owning only a portion) and not paying rent.

                    It depends on the proportion - if the OP owned 1% and paid no rent - I think it would be in GROB...
                    31-03-2020, 17:09 PM
                  • Reply to Selling part share
                    by Bill31
                    Ok thanks.
                    So as i already did a gift of the property a few years back. Do i have to to pay cgt on the rest of the property when i gift it over or sell it to son as cash?...
                    31-03-2020, 16:33 PM
                  • Reply to Selling part share
                    by jpkeates
                    If you gift someone a property (or part of one) and carry on living there, the gift has reservations.
                    So you either need to move out or start paying market rate rent to live there to end that situation.

                    Any transaction done at an undervalue is treated by HMRC as being at market value,...
                    31-03-2020, 15:52 PM
                  Working...
                  X