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CGT or no CGT!

BCASLBCASL Feels At HomeRegistered, Working Together with HMRC Posts: 64
Hello everyone, could someone please clarify a CGT dilemma for me, two properties involved, timeline as follows:

Property A - Purchased 1964 for £4000, lived in until 1987, when Property B was bought for £58000. Owner moved into property B in 1987 and lived there ever since (Primary Residence)

Property A rented out from 1987 to 2007 and then left derelict to date. Owner now wants to sell property A, has had offers for £400,000.

I wondered what peoples views were, I am assuming:

Property B – no CGT as primary residence and the owner will continue to live there?

Property A 1964 – 1987 Primary Residence Relief, 1987 – 2007 Letting relief? 2007 to date, not sure? If there is a CG, from when to when?

Any advice would be gratefully accepted.

Many thanks

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    Agreed on Property B.

    Property A:

    1964 – 1987 Primary Residence Relief - yes (did an election need to be made, if so was it made, or is it just matter of fact? Can't remember.)

    1987 – 2007 Letting relief - yes, I believe so. Remember you have a choice of the higher/lower of something like actual or £40k.

    2007-date - it's not PPR so it's chargeable to CGT. Don't forget last 3 years are exempt irrespective of circumstances. So let's say it gets sold this year, 2009-2011 will be exempt from CGT, and 2007-2008 will be chargeable, unless any other reliefs are available (I expect not).

    Off the cuff! Think this is right though.
  • BCASLBCASL Feels At Home Registered, Working Together with HMRC Posts: 64
    Thanks Monsoon, that seems to confirm my thinking, it's one of those things I only do once in a while and the last one was some time ago!

    Of course, we have a further complication in that because the house was bought prior to 31 March 1982, we need to re-value it as the gainly applies from that date and it LOOKS like the letting relief will be restricted to £40000, due to the long period of letting (1987 - 2007). Need to figure out now how to get it re-valued as at 31 March 1982 - any ideas?
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    I did wonder whether 1982 came into it anywhere - like you, I deal with this stuff sporadically!

    Ideas? No, sorry :o

    Guidance on HMRC website about how to convert? Average house price index comparison/ extraoplation?
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