Help on CGT Letting Relief Please
sloshed
Well-KnownRegistered Posts: 100
Would Somebody mind checking that I am doing this right?
Property Purchased 16 years for £30,000 sold for £120,000 by a couple.
Purchase Cost 15,000
Sale Proceeds 60,000
Gain 45,000
Letting relief
8 Yrs Occupation
8 Yrs let
8 x 12 + last 36 months = 132
Let = 60
Gain before taper 45,000 x 60/192 = 14,062
Chargeable 60% = 8438
:001_unsure:
Property Purchased 16 years for £30,000 sold for £120,000 by a couple.
Purchase Cost 15,000
Sale Proceeds 60,000
Gain 45,000
Letting relief
8 Yrs Occupation
8 Yrs let
8 x 12 + last 36 months = 132
Let = 60
Gain before taper 45,000 x 60/192 = 14,062
Chargeable 60% = 8438
:001_unsure:
0
Comments
1. PPR relief, as you calculated: actual occupation/ownership x gain is free of tax.
2. There is also a letting exemption available, so long as there has been actual occupation by the owner, as follows:
Calculate the exempt gain for PPR, 22,500
Calculate the non-exempt bit, in this case 22,500
Maximum letting relief 40,000
You then get the lower of these three, i.e. 22,500 and therefore no gain.
Joint owners get the full exemption each as it applies to the person not the property.