Capital Gains Tax Query

Capital Gains Tax Query

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I don't have a huge amount of capital gains tax experience and therefore just wanted to check my interpretation is correct - Client has a rental property that they've sold. They purchased 14 years ago, but lived in the house for the first 10 years, before renting out for the final 4 years. My understanding is that they would gain relief for the first 10 years they lived in the property, and the final 36 months they owned the property and didn't live in it. Therefore they should only have capital gains tax payable on approx. 1 year of the 14 years the property was owned (and then their annual exemption x 2 for h&w to be deducted). Can I just confirm that I am interpreting the relief correctly?

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By User deleted
02nd Nov 2013 14:39

Yes, but you've missed one other -

Letting relief. This will be the lowest of PPR relief, the chargeable gain (which as you say is likely to be 1/14th of the total) and £80k (you indicate jointly owned, so 2 x £40k). I'd guess that the gain is likely to be wiped out before you need to think about annual exemptions.

All assuming of course that there is no question about the house being the main residence for the first 10 years.

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By Lee_Harris
02nd Nov 2013 15:12

Excellent, thank you!

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