CGT Booboo

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    CGT Booboo

    I didn't realise until this afternoon that letting relief was banned last year. I bought the flat in late 1980s for approximately £40k. I lived there for 6 years and then moved to my present property, The flat next door sold for £180k 2 years ago. If the flat is now worth £200k, what will the cgt be if my employee income is £22k? The flat isn't well done up eg - the windows need replaced; original ones still there. Can cgt be reduced if I replace the windows? But thinking about it, this would increase the value even more. Can I add my kids names as joint owners to make use of the capital gains allowance X 3 (myself + 2 kids)?

    #2
    What date would the sale be please & what will the CGT rules be then?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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      #3
      My daughter is a care worker but wants to go to uni to do a nursing degree. Because of her experience, she can do it in 3 years. Son is finishing uni and will will working for a housing association. As a guestimate, it would be November 2024 but if it made money sense, I'd do it sooner.

      Comment


        #4
        If you transfer ownership to your children without some kind of trust arrangement, it will be a CGT tax event anyway, so the CGT would be due then.

        Any costs that materially affect the value of the property could be offset against the gain, but replacement windows aren't likely to be 100% q capital event, there's more than an element of maintenance.

        It would depend on when in the late 80s the purchase happened.
        Say there's 32 years of gain, 6 plus 9 months is tax free, so 25 and a bit years is taxable, about 126,500.
        Somewhere in the mid to high 20s 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).

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          #5
          Thanks for replies, very much appreciated

          Comment


            #6
            If you make a total capital gain of say £190K- £40K = £150K and have owned the flat for 32 years and lived in the property for 6 years ,

            Your taxable capital gain during letting period is approx £150K x 25 /32 = £117K.

            You can claim the personal capital gains of £12,500 and pay tax on £104,500.

            Based on £22K job income , £28K is taxed at 18% and £76,500 at 28% = £5040 K + £21,420 = £26,500.

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            Latest Activity

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            • Reply to Gift Property to avoid Stamp Surchage
              by Neelix
              Just watch out she doesn't leave you as soon as the transfer is complete ...................
              19-04-2021, 17:59 PM
            • Gift Property to avoid Stamp Surchage
              by wangw
              Hi guys,

              1st post here thought I try my luck here.

              I have a fairy basic question which I thought many would have come across. I currently own 100% of my main residence (call property 1), and I live with my unmarried partner who has no property under her name. I am at 45% tax...
              19-04-2021, 15:44 PM
            • Reply to Gift Property to avoid Stamp Surchage
              by wangw
              I suppose the other alternative is to buy the property 2 in her name (provided she can afford the new mortgage, if not we can look at JBSP), wait till legally married and we are free to transfer the properties between us. With interest rates where it is, the actual tax savings would probably be min...
              19-04-2021, 17:55 PM
            • Reply to Gift Property to avoid Stamp Surchage
              by wangw
              yeah it is a good question. as it will be a BTL so will just be the usual BTL prudent tests, hopefully just a question of can the rent cover the amount we want to borrow. I think some banks may not be willing to lend to her if she has no other main residence (i.e. HSBC has this rule).

              ...
              19-04-2021, 17:53 PM
            • Reply to Gift Property to avoid Stamp Surchage
              by Neelix
              I suppose the obvious question is can your partner remortgage property 1 with no previous mortgage history ?...
              19-04-2021, 17:19 PM
            • Reply to Gift Property to avoid Stamp Surchage
              by AndrewDod
              Yes most of what you say is right. There is a heavy tax on marriage - which you are avoiding by being unmarried.

              - Resetting the market value for purposes of her CGT which you would be unable to do if married
              - Avoiding SDLT on other purchases in YOUR name
              19-04-2021, 16:45 PM
            • Tax situation on money I paid for deposit
              by Thurrock1
              Hi, I bought a BTL flat in 2008 and wanted to recoup the deposit I paid on this (approx £25000). It is in joint names but the deposit was paid by me only. I wanted to take back that money and wondered how to list this in the SA tax return. If anyone can advise me i would be really grateful. Th...
              18-04-2021, 08:26 AM
            • Reply to Tax situation on money I paid for deposit
              by Thurrock1
              Thank you for your replies. It's hard to get yr head around!! but i think ive got it.

              I am hoping to take some of this deposit back now as monthly repayments (as the flat was bought in 2008 and i need some of the money now). So I think I am ok doing this, so long as, on the sale of the...
              18-04-2021, 11:49 AM
            • Reply to Tax situation on money I paid for deposit
              by Gordon999
              The SA Tax return is for reporting rental income and rental expenses. The £25K deposit is not reported in the SATR .

              The £25K deposit is treated like a second mortgage loan at Nil interest . So if the property costs £100K , the 1st mortgage lender provides £75K loan and you provide...
              18-04-2021, 11:01 AM
            • Reply to Tax situation on money I paid for deposit
              by jpkeates
              How is the money being "taken back"?
              18-04-2021, 09:21 AM
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