CGT on sale of flat

- J
- Juliet
  
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posted
20 years ago

Tue, Dec 9, 2003 3:47 PM

I bought a flat to live in back in 1992. Upon getting married 6 years later my husband and I bought a house that is our current family home but I still kept hold of the flat. I started renting the flat out about 4 years ago but when my tenants left recently I decided to put it on the market. The flat has only ever been in my name, our current house is in mine and my husband's name.

Can anybody tell me what my CGT position will be on the sale of the flat. I'm assuming that I won't be eligible for PPR as it hasn't been my principal residence for more than 5 years.

Any info you can give me to avoid/minimise the CGT bill will be greatly appreciated.

Regards

Juliet.

- G
- gspark
  
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posted
20 years ago

Wed, Dec 10, 2003 4:48 PM

It's a FAQ - This should also give you the links to the Inland Revenue brochure explaining CGT.

Also try the Property Investor Spreadsheets link on my website

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There is a CGT calculator written by an accountant who is also a landlord, so he knows what he's talking about !

Since it was once your PPR and let, I believe you will be able to remove growth in the last 3 years from any calculation straight away and you should also get relief of at least £40,000.

hth

Daytona

- G
- gspark
  
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posted
20 years ago

Wed, Dec 10, 2003 5:03 PM

err should be a maximum of £40,000.

Daytona

- D
- Doug Ramage
  
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posted
20 years ago

Wed, Dec 10, 2003 5:33 PM

It's not the actual growth during the last 3 years, but the pro rata amount over the period of ownership, which is exempt.

And you have corrected the 40,000, as the maximum.(per owner). :)

- R
- Ronald Raygun
  
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posted
20 years ago

Wed, Dec 10, 2003 6:08 PM

Still not right. £40k is the ceiling only on the Lettings Relief, not on the whole relief.

Also, "growth in the last 3 years" sounds as though she'd need a valuation 3 years prior to sale. Of course it doesn't work like that. You take the whole gain during the whole period, deduct indexation allowance, then you time-apportion what's left to the actual and deemed PR months and Letting months, deduct those two reliefs, subject to LR being less than both 40k and PRR, and then apply taper relief and finally the annual allowance.