Capital Gains Tax

[Scarlett]

I want help working out the capital gains tax on my house. Should this be the job of a standard accountant, or a solicitor, or just phoning HMRC to ask? Or does someone else specialise in this?

[Buenchico]

If the house is your main residence, there's no CGT to pay.

Otherwise you should be able to do the calculation yourself. The relevant info, together with an online calculator, can be found here:
https://www.gov.uk/tax-sell-property/work-out-your-gain

[Scarlett]

Hi Buen, I did try the calculator but didn’t understand some of it- who should I ask for questions about it? Citizens advice? Or HMRC?

[calmck]

I used an accountant because the house was shared property bought by my sister and I then transferred to her husband after her death. Cost to do this was shared at £500 each.

[Peter Pedant]

yeah I do
IF ( and I suppose it is the annex you had filled full of chinese labourers and boat people) it is your only residence, then the charge is nil.

let us say it is a second house - I think I have done this before you know

You need to register for capital gains by a separate CGT account. IF you use an official calculator then it may - -- open the acct for you and set the 4 week clock to ticking....

So you have opened your CGT acct - and set the four week clock....

[Peter Pedant]

The input is price of buying
and then price of selling - no indexation now
Four week clock starts at completion NOT exchange

allowable costs - cost of buying ( around £500)
cost of selling ( say £1000)

AND you are allowed building costs of what you did NOT claim as expenses. Capital allowances. So if you have charged replacement of a chimney on rents then ( reather obviously) you can say it is a capital expense ( durr, double accounting)

Then you pay at 18% or 28% depending on your tax code
and transfer the loo-lah in the fourth week

I found it very straightforward

save £1000 - no no - give ME the thou.... here are my details

[Peter Pedant]

who do you ask?
me!
HMRC - they are slower than the police at responding ( geddit)
Citizens aid - no you will get a teenager, very keen etc

[Scarlett]

Thanks Peter.
Nope, I still need help I’m afraid. It’s the bit where it asks whether you lived there. I lived there for 7 years and then rented it for 13 years. So I’m not sure what that changes?

[Scarlett]

The other thing is the expenses -
When I moved in it was a shell of a drug den. I completely did it up, new kitchen/ bathroom/ carpets/ decoration/ garden and railings/ doors and windows. Cost me a fortune. This was 20 years ago so
I don’t have receipts but I do have a list of the work done as I’ve kept old diaries.
What sort of proof do they need?

[bednobs]

are you even liable at all? i understood from your provious posts you only own 1 house, albeit you dont actually live there?

[Zacs-Master]

Capital Gains on a rented property......eh?

[Redhelen72]

If its not your main home - ie you live else where then capital gains tax may be due on it.
You really need to speak to HMRC and not someone on here

[Scarlett]

Yes that was my question- who do I need to speak to with my questions. You are liable to pay if you don’t live there, and have rented it out. Okay I’ll try HMRC.

[Zacs-Master]

Oh sorry, you rented it out. Thought you meant you'd sold it and then lived in it paying rent.

[Redhelen72]

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/capital-gains-tax-enquiries-for-individuals-employees-and-self-employed

[Peter Pedant]

just bout everything you need here
https://www.gov.uk/capital-gains-tax

I am working my way thro - if you have lived in it....
not because I am a fine fellow
but because I will be paying it in a few months

[Peter Pedant]

got down to here

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

the phone page Red H quoted is quite out of date ( they dont even have a date they set it up) - you MUST report and pay electronically

[Peter Pedant]

he partial private residence relief is made simple

https://www.ellisandco.co.uk/news/capital-gains-tax-2021

and where you put it ( reduce the gain and not the tax)

so in your case say the 7 y was 79 months
and you had the property for 20y 200months

then the reduction is 79/200

read the manual to see what is reduced by 79/200

[Peter Pedant]

I DO have an acct and asked how much la-la I put in the calculation - and she said none

if scarlett has a spouse make sure you assign half of the gain to her ( simple document - my love I assign..) I didnt even state who the other 50% went to: the computers pick it up to make sure both sides are paid.

The little palace out the back, 20 y ago, if you have no receipts I wd not claim, as on further enquiries - o god - you wont be able to prove the expense

[Peter Pedant]

I DID make a mistake in a transfer once - assigned a property in 2012 but did NOT pay CGT for the gain from buying to 2012. Mistake discovered in 2020.

and made a voluntary declaration to the taxman: £447 unpaid tax- lawyers fees £3000. you can use a lawyer, but it costs

[Scarlett]

Thanks Peter - I phoned HMRC and spoke to a very helpful lady. I probably would ask my accountant to do the form for me, just to make sure I get it right. I will need to do further checks regarding proving the work I did without receipts, as I don’t want to write it off because it was really expensive!