House sale - Capital gains tax?

It depends on your other circumstances and the type of expenditure you incurred.

For rates look at this link

Peter Saxton from London snipped-for-privacy@petersaxton.co.uk

I'm curious how renting out makes a difference. I bought a flat in Sep

At the time I consulted the IR website, a couple of people at the IR and a local accountant and came to the conclusion that I had to pay CGT on the profit from the sale.

I realise that renting out makes a difference but I am wondering whether I would have been better off renting out the flat for a few years and then selling it.

Thanks Andy

Renting can make a difference, as there is a CGT relief - called, spookily enough, Lettings Relief, which can be worth up to 40,000 per owner. However, it is only available, if the property has been your PPR (Principal Private Residence) at some time.

Actually, in the above example, renting would only have been necessary for the period from when the owner stopped living in it up to 36 months before he sold. Renting during the last 36 months does not help.

They were wrong. Well, perhaps not, it depends on how much CGT they reckoned you'd have had to pay. The facts appear to be that the flat was your main residence from Jan-Aug 2001. Therefore you ought to have been eligible for PRR for 36 of the 47 months of ownership.

The calculation should have been, assuming original purchase price plus acquisition expenses was X, and sale proceeds minus sale costs were Y, then the raw gain would have been Y-1.021X. Only 11/47 of this amount would have been chargeable, and you'd get a 5% taper relief discount. I don't remember what the annual CG allowance was in 2001-02, probably ca £7500, so that would be subtracted. The raw gain must have been over £33732 for any tax to have been payable, and each extra pound of gain should have resulted in tax payable of

That is likely, provided you did not skip the short period of it being your main home, that is the key which gives you 36 months' PRR plus up to 36 months' LR.

You say you "consulted a local accountant". Was that over a pint at the local or was it proper "advice"? If the latter, go back to him and get him to sort it out.

If you used advice from the IR, and misinterpreted it, then the least they should do is allow you the opportunity to correct an error if one was made.

Yes. You have 12 months to "correct" your SA Return for the tax year 2001-02 (you sold in August 2001,IIRC). This means you have until 31 January 2004.