Likelihood of paying capital gains tax?

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    Likelihood of paying capital gains tax?

    Hi all,

    I lived in my old property for 10 years. I then bought another house and let my old property in 2018.

    Im thinking about perhaps selling it next year. I bought the property in 2011 for £150k. Its now worth about £220k.

    I think Im right in saying that I only have to pay CGT on the price increase since 2018 when it became my 'secondary property'?

    What do you think the CGT is likely to be, or how would I work it out?

    The reason why Im asking this is because I have come capital losses that I can use to offset the CGT.

    Thanks





    #2
    Depends on what CGT rules will be next year ( 2023..). F K. Unless you have knowledge of what Rishi is going to do.
    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...

    Comment


      #3
      GCT is based on the total gain over the whole time you’ve owned the property. Under the current rules you’d get relief for the time it was your only or main residence plus the final 9 months of ownership. You also get an annual CGT allowance but as Artful says, who knows what the rules will be next year.

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        #4
        Ah ok, so if CGT is only applicable from 2018 onwards, plus the 9 months, plus my CGT allowance of £12,300, its unlikely Ill have any CGT to pay. (As it currently stands,but may change next year)
        Thanks

        Comment


          #5
          Originally posted by jtufty View Post
          Ah ok, so if CGT is only applicable from 2018 onwards, plus the 9 months, plus my CGT allowance of £12,300, its unlikely Ill have any CGT to pay. (As it currently stands,but may change next year)
          Thanks
          No, the gain is the total gain for the whole time you have owned the property no just since 2018.

          Comment


            #6
            You have made a capital gain= £70K during 2011 to 2022 ( = 11 years approx )

            Your own residence period (2011 to 2018 ) +9 months = 8 years approx.

            your capital gain during own residence = £70K x 8/11 = £50K approx.( Nil cgt )

            Your taxable capital gain ( during letting period ) = £70K - £50 K = £20K

            You can claim the annual capital gains allowance = £12,300 and pay cgt on £7,700

            Comment

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