Help on CGT Letting Relief Please

sloshed
sloshed Registered 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:

Comments

  • bryan100
    bryan100 Registered Posts: 23 Dedicated contributor ? ? ?
    You are confusing two different reliefs.
    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.
  • bryan100
    bryan100 Registered Posts: 23 Dedicated contributor ? ? ?
    Sorry, you've also forgotten the Indexation Allowance from purchase to 5.4.98
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