Capital gains tax and tax credits

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    Capital gains tax and tax credits

    hi i have recently sold a rental property and have been working out my tax liability for the GCT which works out at 2,500 tax to pay and im a non tax payer and this just takes me over the threshold - ok for tax credits pruposed do i need to declare the captial gain as its a capital gain and not income ? as ive just got my tax credit forms to complete - i did however make a loss on my property this year as she didnt pay me rent for months on end - also can i declare the periods that the property was empty for PRR or just the months when i was living there myself ?

    many thanks

    #2
    update - ive been onto the tax credits for the past hour and they are saying not to inclue unless im re-investing or making money from the capital gains

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      #3
      It sounds as if you don't understand CGT. It has nothing at all to do with your rental income or loss and cannot be offset by that (or your lack of general income). PPR has to do with when you lived there, not when it was empty. Some actual numbers would be useful. When did you live there (exact dates), when did you buy it, for how much and when did you sell it and for how much. Declaring or not declaring also has nothing to do with whether you feel you owe tax.

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        #4

        The capital value of any property held by a claimant is ignored but the rental income/profit is taken into account, unless exempt from income tax or excluded from profits under the rent-a-room scheme (section 791 ff of ITTOIA 2005). So no, you do not need to declare it for tax credit purposes. However you may need to declare it for tax purposes if there is a gain.

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          #5
          I forgot to add that there is no capital limit for tax credit purposes, which is why you do not need to declare the capital for tax credit purposes!

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            #6
            Thanks jon i think i understand this - just - ive about 2 yrs when the property was occupied my myself and children and purchase price was 34,000 , sold for 70,000 still under a mortgage which we ignore i guess plus had new windows and boiler in and of course solicitors and estage agents fees , its given me about 2,000-3,0000 to pay to tax man

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              #7
              For any owner occupied property ( and never rented out ) , there is no tax to pay on the capital gain.

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