capital gains tax

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    capital gains tax

    hi all just struggling with a calculation for cgt.
    Bought a ppty in 2002 and lived in it for 2 years approx
    since then it has been let but recently sold this year
    selling price was 70,000 and purchase price 34,000
    bearing in mind ive put in double glazing 6,000 and boiler 3000 and of course solictor fees

    i can work out my prr but what is this letting relief ??

    i currently have annual earings of 9,000 for all main jobs and no other income at the momet just one other let property bringing in approx 3,000 annual
    this is so complicated for me

    Letting relief is a tax allowance that's currently available for a landlord who has let a property that they used to live in.
    It is the lowest of:
    The PPR or
    £40,000 or
    the whole gain.

    So, in your case, it's likely to be the value of the PPR, which can be deducted from the taxable gain in the same way.
    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).


      Here is my rough calculation of your situation :

      Your sales proceeds = £70K - solicitor fees - estate agent sales fee = £68,000 ( approx )

      Your acquisition cost = £34K + £6 K ( windows ) + £3K ( central heating ) + conveyancing solicitor = £44,000

      So your capital gain = £68K - £44K = £24K.

      Your ppr is about 2 years + 18 months after moving out = 3.5 Years. Your exemption for ppr = £24K x 3.5 /17 years = £4.95K .

      Your letting relief = ppr = £4.94 K .

      So your ppr + lettings relief = £10K ( approx) .

      Taxable capital gain = £24K - £10K = £14K.

      Your 2018-2019 capital gains allowance = £11,700

      Your taxable gain = £14k - £11,700 = £ 2,300.

      Your capital gains tax is 18% on £2, 300 = £414.


        Thank-you Gordon that really helpful - much appreciated


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