CGT calculation ?

[benpincus]

Quick question if I may.

I am a higher rat tax payer. Bought a BTL property in 1989 for £50k. Sold it recently for £150k,

Buying and selling and building costs probably come in at around the £10k mark.

What will be tha approximate CGT ?

As far as I can see I do not qualify for any relief (e.g. never lived there)

thanks for any help

[TaxationPete]

I assume you have never lived in the property and any building costs are capital in nature not repairs/revenue the 150-50-10 - your unused CG Allowance £10,600 * 28% so £24,753.
Regards Peter

[benpincus]

ok thanks for that

wow .. that much !

too bad they abolished taper relief ... they talk up dropping 1 penny on petrol prices yet behind the scenes you lose another £10k or so because of a simple budget change !

[Telometer]

Scarcely. Taper relief would have taken your tax rate down to 24%. So cost you only £4k. If you'd only owned it 5 years, you'd have won. Swings and roundabouts.

[benpincus]

i thought taper relief would have reduced the liable amount by 40%

[Telometer]

i thought taper relief would have reduced the liable amount by 40%

And would therefore have taken the 40% tax rate down to 24% having reduced it by 40%.

[JK0]

Wouldn't there also have been around a 30% indexation allowance from 1989 to 1998?

[TaxationPete]

Taper Relief replaced Indexation, you did not get both of them. I assume you are not married, not that it matters know as you have already sold it but yu could have transferred a large enough share to the spouse to mop up their Capital gain allowance, thus dropping the CGT to circa £16,000. Regards Peter

[JK0]

Taper Relief replaced Indexation, you did not get both of them. Regards Peter

From http://www.hmrc.gov.uk/stats/capital_gains/cgt_b.htm

The current capital gains tax system generally only taxes gains which have arisen since March 1982, allowing relief for inflation up to April 1998. Taper relief applies from 1998-99 and the proportion of gain chargeable is in accordance with the Table TA.7. Chargeable gains, after reliefs, are taxed at rates equivalent to the individual's income tax rate as if they were an additional amount of taxable income (taxable savings income from 1999-2000). There are separate tax rates for personal representatives and trustees. There are certain exemptions and reliefs, which are listed in the tables T1.5, TB.1 and TB.2 .

[TaxationPete]

I remember all the complaints when the changes were announced and many owner transferred ownership between spouses to catch the indexation. HMRC eventually backed off and allowed indexation to be locked against the gain up to April 1998 if disposed of prior to 6 April 2008. Regards Peter