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Agnes_


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capital gains tax?
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Hello,

 

I am still new, and very happy to have new client ;).  He is retired and wants to sell his summer property. The thing is that he bought it as a barn for £22k and  converted into cottage in 1988 (total spent £70k). He pays top rate of tax on his income.

Question is how much capital gains tax can he expect to pay when permitted allowances are taken into account? He wants to sell it for about £190k.

How to calculate this? Never done it before.



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gbm


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Depends upon whether he lived in it and/or whether it was a FHL and whether it's jointly owned, but I would guess:

Sale £190k
Cost £92k
Gain £98k
PA £10,600
Gain subject to tax £87,400
Tax @ 28% = £24,472

If he is married, he may be able to do something to avoid CGT, but I would suggest he gets proper advice on this.


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Agnes_


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One more question: does the mortgage on this house affect CGT?


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gbm


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No, the gain is on the profit, nothing to do with how it is funded.

Are you getting proper advice? As I mentioned, there are circumstances which may affect the calculations.

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Nick

Website: www.gbmaccounts.co.uk
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Factsheet | Starting a Business

 
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