Capital Gains Tax

No.

You appear to be due 9+3 years' of private residence relief and 4 of lettings relief. Since the total gain is 41k, the LR ceiling does not apply. So your taxable gain is nil.

There is also a bit of indexation allowance due for the period Dec/90 to Apr/98, but it's not important since the result is zero even without allowing for it. You would deduct 0.252 x £34k from the gain.

No taper calculation is needed because the taxable gain is already zero. If it weren't, you would still each get your annual exempt amount taken off (£8500 for 2005/06, a bit more if you were to sell in 2006/07).

This question is academic since there is no taxable gain, but if there were, then you would pay 40% of your half, and she would pay 20% on hers, unless her half of the gain is more than the amout by which her income is short of the higher rate threshold, in which case she's pay 20% of that shortage, and 40% of the rest.

Don't worry, it would be inappropriate in your case to make one.

I don't understand the question. Do you mean you want to increase the mortgage from its present 30k to 40k so that you can spend 10k on repairs? Or you want to borrow an extra 40k?

Either way, mortgages do not affect the gains question.

But any money you spend on repairs could be set against your rental income. Any money spend on improvements could be deducted from your gain. In your case there is no gain anyway, so it makes no odds.

The CGT is proportioned pro-rata to the time it was your PPR, i.e. from 1990 to 1999 and the time it was let out, 1999-2006, i.e.

7/16ths. There is also indexation, letting allowance and taper relief. So at the very least your gain is reduced to £41,000*7/16.

I suggest that you read the guidance notes yet again.

I found this "Where a gain is made on disposal of a property that has been a main residence at some point, but has also specifically been let as residential accommodation, then a further special relief is available. This exempts a gain of up to 40,000 Where a gain is made on disposal of a property that has been a main residence at some point, but has also specifically been let as residential accommodation, then a further special relief is available. This exempts a gain of up to 40,000 " at

but I can't find it anywhere on the hmrc site. Do you knwo what the further special relief is called? Any links??

Thanks for your reply on this, it made me search a bit more and I found this link

which backs up what you said.

Thanks for your replies.

AP

I've just found the same statement at

and this "Residential Let Property Exemption

Where a gain is made on disposal of a property that has been a main residence at some point, but has also specifically been let as residential accommodation, then a further special relief is available.

This exempts a gain of up to 40,000, or an amount equal to the exempt main residence fraction, whichever is the lower.

An example will illustrate this. Take the flat in the second situation above, where 2/6 of the gain became chargeable to CGT. Let's put some figures on it.

Cost: 100,000 Sale price: 200,000 Gain: 100,000 Period of ownership: 6 years Exempt main residence period: 1 year of occupation plus 3 relief years Total exempt amount of gain: 4/6 x 100,000 = 66,667 Taxable amount = 33,333

Now, the let property exemption gives further relief equal to the amount of the exempt gain, here 66,667, or a maximum of 40,000 whichever is the lower. In this case the 40,000 is the lower but since this is greater than

33,333 no tax is payable.

This relief applies also to the situation where a person continuously occupied part of the property as their main residence but also let part of it during that time.

Note that this relief is available only where the property was at some point the main residence. If it never was, then it is not applicable at all and CGT applies in full to any gain subject only to the general reliefs such as indexation, taper relief and the annual exemption. "

at

but no sign of it on the hmrc site. I'll keep searching and post anything I find, it'll maybe help others.

Thanks again

AP

Hello, Wor Tony, are you a Geordie, then?

I heard this story many years ago about a Geordie who'd been to the western frontier, back in the days of cowboys and indians.

He'd been sent out to do a spot of scouting and he returned white as a sheet and shaking like a leaf. Apparently he'd been nearly surrounded by a group of indians, but fortunately they hadn't seen him and he managed to get away. He'd seen them perform some sort of fierce dance, and he told his pals, once he was back with them, that the dance had been accompanied by menacing-sounding drums.

"Oh dear", said his friends, "were they war drums?" "Of course not," said the Geordie, "they were theirs!"