Quick CGT comp checking.

Quick CGT comp checking.

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Client received flat by way of gift from mother Aug 1995, value £79k.

Lived in it until May 2000, left flat and it has been rented as residential investment property since then.

Nov 03 transferred by way of gift a half share in flat to brother, no CGT was reported then (quick check confirms it was covered by PPR and AE).

May 11, Brother purchases her 50% interest for £125k, this being half the independent valuation of £250k

I calculate the gain as follows:

Disposal of 50% interest oin Investment Property
Proceeds  125,000 Market Value of flat is £250k
Costs incidental to disposal  -2,000 Legals and ehnancements
Cost of Property -39,500 Initial Cost from 1995 is £79k
Gain 83,500
57/189 PPR, actual -25,183
36/189 PPR, last 36 mths -15,905
132/189 Letting relief (time)  -58,317
Letting relief (max) -40,000
Letting relief (limit to PPR) -41,087
Lower of above -40,000
Total Reliefs -81,087
Gain before AE 2,413
Less Annual Exemption (2011/12) -10,600
Chargeable at 28% 0
CGT 0

Replies (4)

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By blok
12th May 2011 13:42

.

the text didnt copy particularly well.

should have been:

Proceeds £125,000

Enhancement costs £2,000

Acquisition costs £39,500

Gain £83,500

PPR actual £25,183 (57/189)

PPR last 36 mth £15,905 (36/189)

Letting Relief £42,413 (96/189)

letting Relief £40,000 (max)

Letting Relief £41,087 (restricted to PPR)

Chose Lower i.e. £40,000

Gain before AE £2,413

 

 

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By ACDWebb
12th May 2011 13:55

Looks about right

My calcs ran the same as yours

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steve_knowles.png.jpg
By Steve Knowles
12th May 2011 16:16

CGT

Agreed

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By blok
12th May 2011 17:01

.

Thanks.

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