Capital Gains Tax - Private Residence Relief and Letting Relief, help me verify this

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    Capital Gains Tax - Private Residence Relief and Letting Relief, help me verify this

    Hello everyone,

    I am selling my first property (UK). I have calculated the taxable capital gains left over and need advice/confirmation as to whether my figures are correct.

    Details:
    I purchased the property on the 16/04/2013 for £155,000 with a residential mortgage.
    I have lived in the property since the day we moved in until 07/02/2014 (10 months), which was the day we moved out to my parents.

    From 07/02/2014 to 01/03/2014, the house was empty as it was being marketed for LET. On the 01/03/2014, it was LET to my first residential tenant till 07/07/2014 (4 months).

    From the 07/07/2014 to 23/10/2014, the house was empty for refurbishment and i lived for a 2 months while refurbishing it as the first tenant destroyed parts of the property.

    On the 23/10/2014 until 22/04/2015 the property was on LET to my 2nd residential tenant (6 months)

    from the 22/04/2015 till now, the property is empty as it is now put up for sale for £265,000

    From the above, i worked out the following CGT.

    Purchase Price £155,000.00
    Selling Price £265,000.00
    Gain: £110,000

    Total Months Owned: 27
    Total Lived: 10
    Total Let: 10
    Total Empty: 7


    This part of the gain is
    £40,237.19 (10/27*110,000)
    Your remaining gain is £69,762.81

    further Letting Relief £39,988.08
    The amount of relief is the lowest of:
    1 the amount of Private Residence Relief already calculated
    2 40000
    3 the amount of any chargeable gain you make because of the letting


    Your chargeable gain will be £29,774.73

    Less Expenses:
    Selling Agent Fees
    £4,200.00

    Less Solicitors Selling Fees
    £1,100.00

    First Property Purchase Stamp Duty + Solicitors in 16/04/2013:
    £3,163.10

    Early Settlement Bank Mortgage
    £6,200.00

    CGT Exempt Amount:
    £11,000.00

    Net Taxable Gain: £4,111.63

    CGT 28% Tax Due: £1,151.26



    Is this correct? Sorry if my calculations seems confusing, if you can, you could recalculate using an easy method using the main variables at the beginning of this post.

    Thanks in advance
    Dean

    #2
    The final 18 months of your period of ownership always qualify for relief, regardless of how you use the property in that time, as long as it has been your only or main residence at some point.

    Comment


      #3
      Full relief? as in i dont pay any tax?

      Comment


        #4
        No, the calculation is not correct.

        However, it is not relevant as your occupation (both deemed and actual) covers the total period of ownership.

        There should be no CGT liability based on the info given.

        Comment


          #5
          Originally posted by da3533 View Post
          Full relief? as in i dont pay any tax?
          No you won't

          Comment


            #6
            damn, thats good to hear. the bad news is, i didnt even know about the 18 months relief.

            So how would this be declared on my tax return? would it state how much i bought it for and sold? and dates, would it automatically calculate that i have full relief?

            Comment


              #7
              Be aware that due to the last 18 months being deemed your PPR you can not claim letting relief for that period. However you will not have a CGT laibility but you will need to report the sale to HMRC. Regards Peter

              Comment


                #8
                You say" we moved in" where you joint owners. If you ththen you will need to rework the numbers for HMRC.
                I note you did not live there for very long. HMRC may question that. Why did you move out. ? Regards Peter

                Comment


                  #9
                  HI

                  its a 5 bed house, i sole owned it. I lived for there since i bought and split up with my partner after 10 months. The plan was to live there but the house is too big for just me, so i gad to move back home, 40 miles away. i then later asked for consent to let from my bank.

                  Comment

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