Which rate of CGT would apply?

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    Which rate of CGT would apply?

    We are thinking of selling one of our rental properties in the Autumn of this year. I estimate that the capital gain after allowable deductions would be around £64k between the two of us. I would not otherwise be a 40% tax payer in the next financial year but will my £32k of this gain count as income? If so then even after deducting my allowance it will take me over the 40% tax threshold and I assume I would then have to pay the 28% CGT rate on at least part of the gain?

    #2
    Please provide your individual gross income including the rental profit in the FY of disposal and I will run the numbers for you both. Regards Peter

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      #3
      The chancellor has said (threatened) he will change the payment of CGT for people with multiple properties so its paid within 3 months.
      That would seem to indicate a change in how the rate is calculated, because mid tax year, the appropriate rate of income tax isn't known for lots of people.

      Or it might turn out to be a stupid statement again.
      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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        #4
        Many thanks
        Rental properties are all owned as joint tenants. Gross rental income should be just under 91000. Mortgage payments are 23140, other qualifying costs approx 14000. My only other income is a pension of 9250 gross pa. My partners is more complicated, (self employed with own company) so best to just concentrate on mine. The property is worth about 265k and we have never lived there. We bought it in 2011 for 195k and I have estimated buying, selling and minor improvement costs to be about 6k

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          #5
          So it would be 28% thus £5,852 for you. You need to tell me your partners gross income including their rental 'profit'. Regards Peter

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            #6
            I feared as much! My partner tends to arrange salary and dividends so as to remain under the 40% threshold but I think this boost to our income will inevitably push us both over the limit.

            Many thanks for your help

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