cgt calculations on prior residence

B

Beezee

Guest
Hello
I bought my home in 1996, lived there for 11 years and moved out last year. The house is now let until this October.
If I were to sell how would cgt be calculated.
Thanks so much for any info.
 
If it was rented for less than 12 months, then there is no CGT liability. If it was (for example) rented for one year out of 12 years of ownership, then 1/12 of the gain (selling price less purchase price less selling expenses) is liable for CGT at 20%
 
Thanks Complainer. Sounds like it would be best to rent it for less than a year andbetter empty than let in terms of the cgt cost!
 
In relation to CGT is does not matter if the property is let or not.

Once the property is no longer your PPR you have one year to dispose of it before CGT is applied. The gain is calculated from the time you bought the house and is calc on the percentage of time that it is not your PPR less 12 months.

The letting of the property is liable to income tax and is calc as follows:

Rental Income ..................... 12,000
Less
Interest Payments ...5,000
Wear & Tear ...........2,000
Other ....................1,000
............................................8,000
Profit ....................................4,000

This is a very simplified version

This will be added to your other income and you will be taxed accordingly
If you currently pay tax at 41% you have to pay 1,640 in tax

For more info on Rental Profit see [broken link removed]
 
What is the situation then if you have already payed tax on your rental income each year.
 
CGT is entirely seperate from income tax. You should of course pay tax (if due) on your rental income each year. CGT will still be payable on disposal of an investment property.
 
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