Quick CGT comp checking.
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 | ||||
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