Capital Gains Tax seeling property I used to live in

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    Capital Gains Tax seeling property I used to live in

    I'm thinking of selling a property I bought for myself July 2001. I lived there for 5 years but I moved out July 2006 and have rented it out since. It is still my sole property though.
    I bought the property for 65k and the current value is approx 200k.
    I paid 20k for a share of the freehold a few years ago.

    I've read about PPR and Letting relief but i'm not sure if either would apply as i haven't lived in the property myself for over 5 years.
    So i'm not sure if i'll have a big CGT bill to pay if I sold?
    I'm also a higher rate tax payer.
    Thanks for any help

    #2
    You still will not have a CGT liability and due to that change of expenses i.e. the freehold purchase you now have circa £14,000 headroom. Please explain "I paid 20k for a share of the freehold a few years ago.
    " LR applies if you ever lived in the property as your sole private residence. Regards Peter

    Comment


      #3
      Thanks for the help.
      A few years ago myself and the owner of the other flat bought the freehold of the pair of flats we own. We now have an equal spilt of the freehold. I think any such fees/home improvements would be deductible from any gains - that's why I mentioned it.

      Comment


        #4
        The freehold cost is a capital item. Repair and decoration are not capital they are revenue and deductible from the rental income. Regards Peter

        Comment

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        • Caught out by changes to Capital Gains Tax
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          06-12-2021, 13:51 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Thank you Gordon, didn't see your response this afternoon. I will look at this with fresh eyes tomorrow as it's late now.
          I've put some figures in my reply to a post just now but answers below to your questions.

          a] £80k Jan 2021 sale price.
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          08-12-2021, 00:55 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Andrew, apologies only just seen your post [was it awaiting approval did you say?] answers are:

          Purchased March 1982 as joint tenancy - so equal split of 33 1/3% each party
          Parent 2 died September 2007 - as joint tenancy I inherited their share - so at this point I own 100% of property...
          08-12-2021, 00:41 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          JP Keates
          I wasn't aware that refurbishment deductions only applied in terms of letting out the property. On the CGT calculator it asked 'How much have you spent on improvements since you became the property owner'.....

          Here's the timeline:

          March 1982 - 1992 3 Owners,...
          07-12-2021, 18:01 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          JP Keates et al - thank you very much for your assistance. I have this afternoon emailed an accountant to try and get an appointment urgently. I hadn't realised it was all so complicated and it was remiss of me to not be aware of the CGT changes made in 2020 due to not renting out the property. Thanks...
          07-12-2021, 17:28 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by jpkeates
          Refurbishment while you were living there is only allowable against CGT if it was solely and exclusively for the business, so if it was to prepare the property to be let, it would be OK.
          If it was simply to improve what was then your home, it fails the basic test.

          Get yourself to...
          07-12-2021, 16:22 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          The probate resets a lot of the stuff, but my main response was unapproved
          07-12-2021, 15:36 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          You are really short on detail:

          Date (year & month) bought in joint names ______ (what % was yours then)
          Date it converted to your sole name ______ (presumable date of death of parent 2?)
          Declared vale at probate _________
          Capital expenses between date of probate 2...
          07-12-2021, 15:33 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          We were all joint owners. Bought it with parents. I lived there for 10 years before buying own home. I became sole owner upon their deaths. Rented out since 2007-2019. Empty last two year as trying to sell. Hence I was off the landlord radar. I am now extremely worried by your statement that refurbishment...
          07-12-2021, 14:53 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          Let us know the exact timescale and money involved year by year - I am sure some kind person (or even myself) with do a calculation for you so that you can assess the risks involved
          07-12-2021, 14:33 PM
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