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    Cgt

    I bought a house in 2002 and lived in it until 2005, paid £56950.00 cash. My income is just over £25000.00 per annum gross, I rented the house out from 2005 up to present date. If i sold it now for £110K would any gain be added to my income before any lettings relief is applied? What would the gain be/

    #2
    The CGT is a different tax to your income tax.
    It isn't treated as part of your income (other than to work out which CGT tax rate you should pay).

    It has its own allowance and calculation.
    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


      #3
      Thank you jpkeates for your prompt reply. So the gain is approximately £50K taking into account solicitors fees etc in purchase and sale.So would i qualify for full lettings relief of £44K for the period i rented it out? And PPR for first 5 years i lived in it? My CGT tax rate would be 18%?

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        #4
        The calculation for PPR is done in days, so the figures are all approximate.
        You'd get PPR for the first three years you lived there (plus, currently, an additional 18 months), so 4.5 years out of 17 (about £13k would be tax-free).

        In your case, the lettings relief is capped at the level of the PPR, so it would qualify for about 13k of letting relief, meaning the taxable gain would be about £26k.
        You have a personal allowance (assuming you own the property on your own) of £12k, so there's a taxable gain of about £14k.

        I think your income plus the gain keeps you in the 18% bracket, so you'll have about £2.5k to pay in tax.
        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


          #5
          The rules on letting relief will be changing after 5 April 2020 ( most likely " no lettings relief " for most sellers ) :


          Letting relief – proposed changes

          There is currently a Consultation Document (“ConDoc”) out in respect of mooted changes to Lettings Relief.

          The reform will significantly limit the availability of Letting relief and restrict it to those who share the occupation of their home with a tenant. In other words, in circumstances where one has a lodger.

          This will apply to disposals that take place on or after 6 April 2020.

          Shared occupation is considered to apply where the owner lives with the tenant in the same property and continues to occupy that dwelling as his/her only or main home throughout the let period.

          As such, the narrower version of Letting Relief will not be available for any periods where the owner no longer resides in the property with the tenant.

          The Letting Relief changes will apply to all disposals made from 6 April 2020. From that date, only those periods where the owner was, or is, in shared occupancy with the tenant will qualify for lettings relief

          ( copied from : https://www.etctax.co.uk/letting-relief-changes/

          Comment


            #6
            https://www.gov.uk/government/consul...illary-reliefs

            This consultation aims to hit owner -occupiers by reducing PPR and lettings relief :

            In line with both those ongoing commitments, at Budget 2018, the government announced that 2 of the ancillary reliefs would change to better target PRR at owner-occupiers:
            • the final period exemption will be reduced from 18 months to 9 months, although the special rules that give those with a disability, and those in care, an exemption of 36 months will not change
            • lettings relief will be reformed so that it only applies where an owner is in shared occupancy with a tenant

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