Share this content
0
365

Capital gains on 2nd property

Capital gains on 2nd property

Hi,

I had a 2nd property which I purchased in June 2012 and sold in Feb 2017, with a gain of £70k

I lived in the property from June 2012 to July 2014 and again from Nov 2015 to Feb 2017.

It was rented for 15 months out of the total 56 months owned

Can I claim for both PRR and lettings relief?

My calcs are as follows: Lived in property for first 25 months + final 18 given = 43 months. Relief therefore is £70k / 56 months x 43 = £53,750. £70k less £53,750 = gain of £16,250

Letting relief is £70k / 56 months x 15 = £18,750, therefore no tax is due on disposal

Does this seem correct, bearing in mind I own another property?

Thanks

Replies

Please login or register to join the discussion.

By DJKL
14th Nov 2017 17:13

Does other property ownership period overlap this property ownership period? (June 2012 to Feb 2017)

What main residence elections have been lodged?

What did you use other property for during above period?

Thanks (0)
avatar
to DJKL
14th Nov 2017 17:43

The other property was purchased in 2006 and I lived in that property until 2012, when I rented it out (and still do).
The property I sold was elected as my main residence.

Thank you

Thanks (0)
By Ruddles
14th Nov 2017 18:37

Your letting relief isn't quite correct - part of the letting period falls within the last 18 months so you don't get that bit twice.

Otherwise, your calculations are correct. There are, though, other issues to consider as suggested above. Go seek professional advice before dropping yourself in it.

Thanks (0)
avatar
to Ruddles
14th Nov 2017 17:44

Thank you

Thanks (0)
15th Nov 2017 10:39

For clarity, Lettings relief is the lower of £40,000, PRR claimed, or the net gain after other reliefs.

Thanks (0)
avatar
15th Nov 2017 17:13

Not that it affects the result or therefore matters a great deal, but my view is that you're not entitled to any letting relief. Rather, I think the gain is wholly covered by relief as follows:

First 25 months - relieved by s.223(2)(a)
Next 13 months - relieved by under s.223(3)
Final 18 months - relieved by s.223(2)(a)

Not an issue in this case, but it could make a difference if the periods of absence and letting were longer - interested to here other opinions.

Thanks (0)
By Ruddles
to tonycourt
15th Nov 2017 17:20

Provided that the periods of residence are eligible for PPR, I would agree.

Thanks (0)
Share this content