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CGT -Residential flat, formerly own home now sold.

Married couple owned a rented out flat. Sold and subject to CGT, I'm looking to minimise their tax.

Didn't find your answer?

I’m a tax agent for more bread and butter self-assessment issues, looking for a little assistance in this trickier matter.

Couple buy flat for 40k in May 97 and then sell it in Feb 2021 for 120k.

What are the CGT correct claims for PPR and resulting CGT tax due?

Flat was then decided to be rented out and that started in Feb 08 and last received rent in July 2020.

Is the purchase of their new house, presumably in 2007 crucial for its date, or is it later when they moved into that from the flat?

With new rules this year, 2020/21, are the original costs of purch/sale still both deductible from the gross gain, and what about other capital expenditure throughout the rental period, can that still reduce the gain to be taxed too?

Both spouses have jobs with £30k salary.

I've only just been told about this and what about this new 30 days to inform HMRC, maybe solicitor informed them, information a little thin for final figs for purchase costs and if they have any further capital expenditure receipts. Are they still relevant as I've always asked them to keep capital receipts aside for the past few years and if they are still relevant I will ask them to hunt ‘em down.

 

Replies (68)

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By David Ex
24th Aug 2021 00:47

rhangus. wrote:

I’m a tax agent for more bread and butter self-assessment issues, looking for a little assistance in this trickier matter.

Does your professional indemnity insurance cover you for giving tax advice?

Your post suggests that this is not your area of expertise. Perhaps consider handing this to someone else to avoid any risk to your practice should you use bad advice received here.

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By SXGuy
24th Aug 2021 07:56

Can't believe an accountant is asking how to calculate cgt without at the very least looking it up themselves.

Its really not that hard to find the info nor work out the cgt.

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Replying to SXGuy:
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By Tax Dragon
24th Aug 2021 08:44

I disagree. CGT, as the OP notes, is not bread and butter. Rules have changed significantly since the OP would have covered the basics in training. It's a minefield of unknown unknowns and a recipe for error.

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Replying to Tax Dragon:
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By SXGuy
24th Aug 2021 10:15

With respect. It's not my Bread and butter either. However I am able to troll through a search engine to find out the rules, how to calculate and apply it. Surely as accountants that is what we should do whenever we come across something that we don't deal with day to day.

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Replying to SXGuy:
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By Tax Dragon
24th Aug 2021 11:19

Sure, just like I hope my solicitor is relying entirely on internet searches to help construct the case against my GP. My GP, as you've probably guessed, thought he could perform my c-section himself, having read all about it online.

But enough already with the analogies. Point is that accountants take years to train, so do tax specialists. They are separate and distinct skills, albeit in related fields. When Jo/e Public rocks up in here with some issue requiring a bit of knowledge and skill to sort out, we suggest appointing an accountant. We don't suggest going away and using search engines. Seems to me that, when an accountant rocks up with an issue outside his or her training, as here, then it is not inappropriate to suggest what David Ex suggested, and it is inappropriate to say what you have said.

And even if you personally might be able to work out the answer this time, I have seen enough tax ignorance displayed in here by accountants to know that not all of them would get to the correct answer.

Hence, I remain in disagreement with you on this occasion.

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Replying to Tax Dragon:
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By SXGuy
24th Aug 2021 11:24

That's fine, you're entitled to disagree just like I am :)

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Replying to SXGuy:
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By Tax Dragon
24th Aug 2021 12:52

SXGuy wrote:

That's fine, you're entitled to disagree just like I am :)

That's splendid, but I am left wondering what search criteria you put into your engine to find out that s46 of TCGA is disapplied by Para1(3) of Sch8 to that act.

If you didn't know to search for it, you wouldn't ever find it.

It's the unknown unknowns that get ya.

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Replying to SXGuy:
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By paulwakefield1
24th Aug 2021 11:38

SXGuy wrote:

...... However I am able to troll through a search engine ......

That gave me a giggle.

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Replying to SXGuy:
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By rhangus.
24th Aug 2021 13:13

You say, "Can't believe an accountant is asking how to calculate CGT without at the very least looking it up themselves."

I personally don't get that simplistic conclusion when you could have helped with some specifics, if you are so bright.

Just who is allowed to ask about what they don't know, as it will be in the books somewhere?

It's all so simple is it?
You never humbly wandered over to someone in the know or spun around in your chair to ask a person more knowledgable on a subject?

My mathematics degree from, shall we say a wee while back, is not so helpful now, or relevant right now, but I can't be that stupid then eh?

After looking it up with my brain and not your huge one, I'm right here, humbly asking for assistance.

can u help with any, just one maybe of the specifics of the case at hand?

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Replying to rhangus.:
Stepurhan
By stepurhan
25th Aug 2021 08:27

Whilst maybe not "bread and butter", CGT on residential property sales, especially ones that have been a PPR, are not exactly obscure transactions either. It is the sort of thing you would expect an accountant in practice to know, so the comment is not entirely inappropriate.

Even if it was completely out of order, you are still asking for free advice, as opposed to engaging a tax agent with the relevant knowledge as suggested. That being the case, going on a little rant is not a wise move. You just come across as entitled, making it more likely people will, at best, ignore your query. At worst, you might even prompt someone to lead you in completely the wrong direction.

You are the only one for whom a correct answer is valuable. No-one else has a direct interest or owes you anything.

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By lesley.barnes
24th Aug 2021 08:55

If you are going to calculate the capital gains you need to have a look through HMRC manuals. Start with this and go through the calculations systematically, don't over think it. Does your professional body have some helpsheets you could use?

www.gov.uk/government/publications/private-residence-relief-hs283-self-a...

www.gov.uk/tax-sell-home/let-out-part-of-home

In answer to your question yes you do need the client to dig out any receipts for capital spend on the property and you do need to take into consideration the original purchase price. As for the start date to calculate the PPR the help sheet above gives examples of empty then let properties and how to deal with them.

Do you know why there was a gap at the beginning between the client buying their house and moving from their flat?

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Replying to lesley.barnes:
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By rhangus.
24th Aug 2021 13:22

Thanks for replying.
That link talks in the main about letting relief which is available to those who partly let out their accommodation. They completely let out what was then their former home and now a fully let property for a while.

Yes, I agree with the exp aspect, ta, on further looking, but not at the help sheets or books but Taxcalcs calculations and assistance still show appropriate boxes with the PRR available.

But what has changed this year then, as was this PRR not available last year ie 2019/20?

"Do you know why there was a gap at the beginning between the client buying their house and moving from their flat?"

I'm unsure on that but with what I'm taking in because I'm trying to read up on this, but I'm not sure that is relevant here, which is why I wrote the question below showing my uncertainty.

"Is the purchase of their new house, presumably in 2007 crucial for its date..."

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Replying to lesley.barnes:
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By rhangus.
25th Aug 2021 10:31

A belated thanks Lesley for at least your considered opinion which I appreciate and some specific attention.
I know the original purchase price has to be considered, not my best written effort in my opener was it, but my knowledge just needs pushing either way on one or two items and I have largely completed it now.

The clients bought a new house and then Mrs X, a little while later, not sure of exact months as client having rough time at mo, so to arrange a final meeting ASAP, so have about 3 draft figures in at mo.

But say Feb 08 was rent commencement date, is PPR relief available up to this point, plus the newly halved again 9 months or to an earlier point such as purchase of new house over a year earlier then there's the gradual move in, how long does the couple get the relief? is the relief considered available up to the time the flat was first rented or not so generous and just to purch date of new home or first signs of move from flat or a designated day that they have officially said, "we live here now", that incidentally, I don't yet know, hence clarification needed both here or elsewhere and with clients, hence draft for mo.

last rent was Aug 2020, replacement boiler for 3k necessary to sell property in Dec 2020 and a few costs of about 400 in doing up the place from Sep 20 to Feb 21, are they all selling costs for CGT calc, and not some post trading expense in rental income?

TaxCalc CGT sale proceeds expressed gross or after the sale costs deducted or are they listed in exps separately so as TaxCalc shows full gross sale and net purchase cost, with cost of prof fees and associated costs in the exps list again?

Thanks for any light shone.

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By ireallyshouldknowthisbut
24th Aug 2021 11:28

As an aside its very unlikely there would be any capital receipts for a flat unless its ground floor and extended into the garden.

Almost everything you do in a flat would by definition be a repair. Eg replacement kitchen or bathroom so I am not sure what you have disallowed as an expense on a year to year basis but that may need to be reconsidered, and if in time there could be missing income tax deductions available.

Property tax can be complex. If you just do really simple SA's and property tax is not normal business for you, then I perhaps suggest your clients (and presumably this would be the last returns you do anyhow) seek professional advice from a specialist. The numbers are not exactly small when it comes to CGT, and this would be routine for many firms.

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Replying to ireallyshouldknowthisbut:
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By Tax Dragon
24th Aug 2021 12:19

ireallyshouldknowthisbut wrote:

The numbers are not exactly small when it comes to CGT, and this would be routine for many firms.

Yes. Just as there are hundreds of c-sections every day, to the point of being routine for the teams that carry them out.

Incidentally, the members of those teams would not necessarily make good GPs. It's different skillsets. Simple as.

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By rhangus.
24th Aug 2021 12:57

Sorry for length here, as the bishop said to the actress.
Can’t it just be confusing, even for people who are otherwise fairly savvy?
I’m only giving this one try as the OP, and just as expected, I feel I might get side tracked by quite a few criticisms for this and that with various judgements being made when I thought we can just ask Qs for quick assistance in here, to those who want to assist in this reasonable but far from perfect Q in a far from perfect world.
I am beginning to think that simple ask is a step too far.

Can’t seem to get quick definitive answers to what must be simple to someone, who may have already done something similar in last 4 or 5 months for a 2020/21 SATR.

Yes I’ve considered passing on to those who deal daily, but with a little less moaning and a wee bit of reasonable assistance, I can surely do this.
I've put in many hrs but I'm here and in need of assistance. There is a lack of clarity everywhere, perhaps even in my request and I can assist with that, should you wish to assist, but some just wish to critique and then stick head below parapet escaping real opinions on their knowledge, cos so far, short on significant answers never mind definitive ones, even to some yes n no ones.

Examples on HMRC site are often with Letting Relief given after PRR on sale in 2019 and no mention of part of main house letting which is what I thought was the qualification subject for the LR, is it not?

No examples of late with cap expenditure throughout and whether we can still deduct these enhancements costs on the sale, and prof fees/exps on the purchase/sale, but its not clear with the change coming in from 2020/21 that CGT relief is given for capital expenditure throughout letting? I'm gonna answer this one myself and say yes.

Would the solicitor not have to report the sale of the property (new rules) within 30 days, as surely that can’t always be the responsibility of the tax agent?

HS283 Private Residence Relief (2021) - GOV.UK (www.gov.uk)
Even this did not assist as does not seem to cover any of my above points, here or in opening.

I’ve not always had definitive answers, even on my “bread n butter stuff” but in smaller figs, and on odd occasion, I have claimed or not claimed something and put my relevant reading as a supporting doc in client file.

Even sometimes, I value my time, but I know I value it too little too often and so for quickness I thought maybe I can be assisted. Also, it should be interesting to be involved in a discussion for once but not off tangentially as I feel some are trying to take this, way into another debate.

I don’t want to fall short in claiming an available relief in this scenario.
in this year of change, beyond the LT norms of CGT calcs.

Perhaps if I can get any assistance on some or most I can then get my final list of queries set out for the clients to answer in order to complete their SATRs. I don’t want to have to ask them for receipts of Capital expenditure which I have stressed endlessly to them they must keep for this very day when I have seen nothing of late, in examples, to suggest that enhancement expenditure is any longer required, but meantime what about the selling price and purchase price, do they include the fees and associated costs from the solicitor as normal? I believe the answer in this transition year would still be yes to all these costs as still allowable in working out the basic gain.

Then is it the reliefs that come in after that? Can that at least be definitively answered for me please?
I cant see how letting Relief applies, just the PRR, if you pls too?

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By rhangus.
24th Aug 2021 13:02

Yes, not my area of expertise.
But I'm sure you once did your first of something or other.
Looking for assistance, can u help with the specifics of the Q pls in this CGT change year as far as I can see?
Any examples I see are leaving me with more Qs.

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Replying to rhangus.:
paddle steamer
By DJKL
24th Aug 2021 13:30

People tend to do their first of most things supervised, that is what training contracts etc are for, and even after that firms put in place guidance and structures for staff to learn and be supervised re areas of work new to the particular individual.

And when a firm does not have the expertise in house there are firms of accountants out there who will deal with the issue with the accountant on board, JC Exchange was such a scheme with Johnston Carmichael, sure there are others.

https://johnstoncarmichael.com/about-us/jc-exchange

There is no disgrace hiring in paid for expertise, it is not hiring it in when you ought to have that is the disgrace, effectively going DIY whilst charging a client is really unfair to the client.

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Replying to DJKL:
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By rhangus.
24th Aug 2021 15:15

Rental properties a few years back were also not my bread n butter after turning many down in the past, but I decided to study up and do as there was nothing much to them except a few unique rules to that but otherwise the same idea as a self-employed business.
However, now I find my clients have sold up and it's my last tax returns for them.

I now find there are a few changes to rules and a few expenses I thought were available to me are no longer there and a new rule or two, so therein lies the complications as I am not a complete novice but the lack of assistance from the bigger mouths in here is astounding

Is no one sure then on the rule changes as of April 2020, looks like?

Period of flat being PPR, may or may not include a time when the new house was bought, but not quite ready to move in to?
And also a potential further period of relief where flat may still be deemed PPR before the flat rental starts, even if the couple are securely into their new house by then, is it still a further short period of relief?
So is the house purchase date not officially required so long as it's before the rental period starts? ie is the latter the date we need for PPR?
Can someone clarify this tricky bit for some of us, esp for me pls?

So the new house lived in for a period before the flat is ready for let, surely CGT relief available there too in form of PPR?
Then more relief for last 9 months as well for PPR?

The icing on the cake, a big ask, I don't expect but who can show in a nice calc with the info avail for say 2k in purch costs, 3k in sale costs, and 3.5k of capital extensions in between with the other dates made available, until I get my final info from clients?

I think I've given away here more info on the knowledge front than a couple of the complainers.

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Replying to rhangus.:
paddle steamer
By DJKL
24th Aug 2021 15:24

What you know is always easy, it is what you do not know , especially when you are unaware you do not know, that generally catches you out.

So re your mastered specialist subject of property rental and tax, often things like premiums/deemed premiums/reverse premiums and contractual and non contractual obligations are the bits that catch one out, or repairs or capex decisions, or CIS rules, all can be hot topics, and of course vat is always an interesting input.

My point here is if you did not fully cover all these with your property rental learning there were possibly bits you did not know you did not know and that could well be the same with your proposed CGT self studies.

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Replying to rhangus.:
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By David Ex
24th Aug 2021 15:32

rhangus. wrote:

the lack of assistance from the bigger mouths in here is astounding

I think I've given away here more info on the knowledge front than a couple of the complainers.

Without wishing to start an argument, your contributions to the queries of others over the years have been pretty modest.

I think the legitimate concern here is that the gap between your knowledge/experience and what your client requires is far too large to be bridged by contributors on here.

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Replying to David Ex:
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By rhangus.
24th Aug 2021 16:16

I am thoroughly aware my contributions have been minimal on here, and it is obvious why.
It is clear when someone wishes to ask a perfectly reasonable Q for clarity on a subject he may not be familiar with, books and HMRC site get mentioned and asked to get on with it, so as some will no doubt wonder just what is it ok to ask about, where the natives on here will tolerate giving their contributions without making such a big deal about it.
There must have been half a dozen points of confusion for me at outset and maybe just one, the costs one only has been clarified by myself at the same time as a contributor, otherwise, the mouths with both the knowledge and the strong objections are unable to give straight answers to the clear cut obvious points of contention.

Meanwhile yesterday or tomorrow someone will come on here and ask why their tax does not go up when they declare their client's untaxed bank interest, or what is a personal allowance and nobody will even pull their leg.

I like the ones where half the sentence is missing and everybody nicely obliges them by pretending communication is unimportant. "What is whitnit?"

I love the high standards of hypocrisy.

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Replying to rhangus.:
By ireallyshouldknowthisbut
24th Aug 2021 16:18

Picking out one of the vary many points here (I don't have the time you need to go over this, the rules on PPR relief and periods of absence are complex), what are the £3.5k 'capital extensions'?

I am intrigued.

NB if you are adamant that you want to do this despite various respondents advice to the contrary, then a good place to start that is Carl Bayleys "how to save property tax" published by Tax Cafe which is a good primer. I recall reading it in many years ago when I started out in property tax, and its a good launching off point before getting into the legislation and manuals which are of course a lot more opaque. For £20 you cant really go wrong.

https://www.taxcafe.co.uk/property-tax-guide.html

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Replying to rhangus.:
By ireallyshouldknowthisbut
24th Aug 2021 17:23

I cant help it, if the help you have been offered has been taken the wrong way. You cant expect a message board to give you an introductory course on property tax. From the type of question you are asking its clear to the tax professionals on here you don't know enough to know what you don't know and you have had some gentle and not so gentle nudges along those lines.

I was offering to help you with the discreet point of capital vs revenue spends which given the value and the fact its a flat seems unlikely to be correct, but you have declined to provide information so we don't know if its right or not. Might be might not.

I feel genuinely sorry for your client. Their situation seems to be routine and a competent accountant could deal with it in a matter of a couple of hours. Last week I was referred to by another accountant who's client was gifting a property to their children. They are a fully qualified accountant, but didn't know enough about it due to the split of commercial and residential letting. They had a vague idea and were not a million miles off, but would have missed one very important point. I charged all of 3 hours to deal with it. Saved the client £50k. Other accountant delighted. Client delighted. I refer stuff all the time outside of my skill set. VAT, no clue for example. Client pays for the time, its no skin off my nose.

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Scooby
By gainsborough
24th Aug 2021 16:26

OP, without commenting on the CGT knowledge comments above, are you just working on the 20/21 SATR or are you also completing the 30-day CGT report which, assuming there was CGT due, should have been filed in March 2021 for a Feb 2021 disposal? Have you started the ball rolling with the clients registering a CGT on UK property account? Are you aware that the 6 month late filing penalty will hit next month?

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Replying to gainsborough:
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By rhangus.
24th Aug 2021 16:41

I'd appreciate if you read the comments above where I address the 30 day issue.

"without commenting on the CGT knowledge comments above"
Then I'm not interested because that is what is required.

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By rhangus.
24th Aug 2021 16:45

I'd appreciate just one effort in the right direction of my CGT relief specific requests, else I'm just gonna step back from the clearly unhelpful folks in here in their comfortable herd mentality of attacking someone who simply asked for their assistance.
Anyone willing to be helpful, by addressing my outstanding issues, I would be very grateful.
I will glance back tonight but I'm expecting more unhelpful criticisms, especially as the herd mentality has now commenced.

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Replying to rhangus.:
paddle steamer
By DJKL
24th Aug 2021 16:56

Methinks you ought to consider looking at the tenor of your reponses on this thread (and I should add some of the older threads you have previously posted on) to maybe understand why some people on here are now not going to help you, for example someone up thread (Edit -Gainsborough) just gave you a heads up on the further ticking clock re the 30 day reporting and extra penalties deadline and your not particularly friendly response was that this was not what you were interested in hearing.

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Replying to DJKL:
Scooby
By gainsborough
24th Aug 2021 17:25

Thanks DJKL. In my original post, I did actually mean that I wasn't going to get involved in the "lack of CGT knowledge" debate but, yep, I am definitely not wasting my time looking at this thread again.

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By petersaxton
24th Aug 2021 16:50

I dont do complicated CGT calculations every day, but I do look at HMRC manuals and my tax books if I don't know the answer off the top of my head.
A client had a very complicated CGT calculation so I spent a couple of hours poring through my tax books and coming up with the calculation. I gave my calculations to my client and admitted my lack of experience. He suggested we call a tax expert who provides advice over the phone. In half an hour he did the calculations off the top of his head. I was pleased to say that his calculations agreed with mine.
The OP seems to be asking for a lot. I would read up on it and only ask about what wasn't clear to me.

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By Tax Dragon
24th Aug 2021 17:04

I'm happy to help.

Let's start by calculating the gain before reliefs.

We're making assumptions you've provided for that purpose about costs. So... tell me more about that lease extension you mention. When was that, what were the terms before and after?

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Replying to Tax Dragon:
paddle steamer
By DJKL
24th Aug 2021 17:13

Thought it was "capital extensions"- presume that is where you dig down and fall out with a member of Led Zep.

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Replying to DJKL:
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By Tax Dragon
24th Aug 2021 17:24

AFAIK, falling out with a member of Led Zep has little or no consequence for your CGT liability. A leasehold extension, however, does. As it's not wholly unlikely that such an extension occurred between 1997 and 2021, and as the OP has referred to an extension, I'm sticking with my interpretation.

(And, while it might be more fun for me to set out some assumptions and invite SXGuy to calculate the pre-PRR gain, as he says it's so [***]-easy, that might appear a little vindictive. So I'm resisting that temptation.)

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Replying to Tax Dragon:
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By DJKL
24th Aug 2021 18:15

I am actually going for "capital extensions" to mean capital expenditure.

Edit- Also, with R Angus in the name property might well be in Scotland (my wife used to work with an R Angus) and if it is then the lease considerations likely evaporate as you cannot have leases of residential property in Scotland over 20 years in length, in fact I have rarely seen a residential lease longer than 12 months)

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Replying to DJKL:
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By I'msorryIhaven'taclue
24th Aug 2021 18:29

It's a flat. Can you have an extension? Could be ground floor, I suppose.

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Replying to DJKL:
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By Tax Dragon
24th Aug 2021 19:43

You Scots are weird. Where d'y'all live?!

(And, if it is in Scotland, what is it that could have been bought in 1997 and sold in 2021?)

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Replying to Tax Dragon:
paddle steamer
By DJKL
24th Aug 2021 20:37

A flat, perhaps.

We by chance own a double upper flat, part of a Victorian property semi detached, strangely by chance it was purchased in 1997. When we purchased it was a feuhold but with no duty/term, in 2003 Feus went up here and in Scotland one tends to have absolute ownership.of flats as well as houses, the different flat owners own the common parts pro indiviso with the other owners (all own a share of the whole) , so effectively both myself and my downstairs neighbour both own the solum (ground beneath the flats) and the walls, roof etc are in part jointly owned pro indiviso and partly distinctly owned. (for instance I own upper front and rear elevations solely in my name, gable walls, roof, drains etc jointly owned)

My point was that in Scotland there really are no leasehold interests in residential property of any length (social housing excepted since Feudal Reform) ,if one goes back to the Land Tenure Reform (Scotland) Act 1974 residential leases were clearly set at 20 years as the maximum, it is why for vat a major interest is I think in E & W 21 years but up here 20 suffices.

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Replying to DJKL:
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By Tax Dragon
25th Aug 2021 00:36

You Scots are bloody sensible. Why doesn't the rest of the UK do similar?!

Presumably the 2003 adjustment is (or was) simply not a disposal (in law and thus for CGT)? A bit like... forget the name of the case, Thingy v Brown?

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Replying to Tax Dragon:
paddle steamer
By DJKL
25th Aug 2021 10:16

Your view on English land tenure accords with my late father's (he read law at both Oxford and Edinburgh but practiced up here all his working life), he did feel some aspects of the English legal system were superior to the Scottish one but land ownership and tenures was certainly not one.

In Scotland even with Feuhold the position with ownership was normally effectively the same as it is now , whilst properties did originally carry feu duties these mainly either stopped being collected or were redeemed long before 2003, I never paid one (first property bought in 1985) and I don't think my father did either. (first property bought in 1950s)

The main difference with the 2003 reforms seems to have been re rights and restrictive burdens re properties , which gave feudal superiors the right to say give permission for changes/improvements, or charge a fee re same, having said that even they by the late 20th century were not really that common, whilst there are still rights and burdens most of these sorts of powers were swept away in the 2003 reforms.(And the ability to lease dwelling for over 20 years had gone a long time before, so long lease renewals never really featured)

Sorry above is a bit woolly, whilst I deal with property it is our solicitors who really understand all this and above is merely the odds and ends I have picked up over the years, probably poorly expressed and error strewn.

This article may give you heart, looks like they may now be trying to reform land tenure down south to be similar to up here.

https://homereportscotland.scot/leaseholds-outright-ownership-facts/#:~:....

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Replying to DJKL:
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By rhangus.
25th Aug 2021 11:21

My English is not great on here but still above avge I'd say, cos I don't have time to speak with you as one of the half a dozen of AWs finest time wasters, sadly just 2 relevant individuals, who seemed to take the time to answer my Q and I am v grateful for that and to them. So pls keep out if nothing relevant or helpful to say other than carrying on to be the hyenas you clearly are from the pathetic comments given.
I have no interest in your 20 yr lease boring irrelevance as it is N/A to me or my Q.
To all the other non-answers and people looking to snipe it's truly awful and typical in a society going to the dogs. Fight back against unjust comments and it's likely me who will suffer the indignity of the stupid cancel culture sweeping over every organisation in the land.
While giving out as a group is fine, but defending, taking on any biased opinions or more likely baseless comments is not allowed esp if you do twice as hard right back Reason is I want the nonsense to stop as I did not ask for the silly, irrelevant unwelcome nonsense I am now getting from certain individuals.
However, if I had to get them back, but let's hope there is no more and so no need, then that's when the absurd piles on top of the ridiculous and the little snipers within here, group together, cry for authority to step in because they can't take the flack back at them, which would just be the justifiable retort to their unwelcome interjections of non-help, which I am doing well to largely ignore to date. But I do hope admin have their fair eyes on two or three louder individuals with baseless claims.

Be fair, watch the sequence of events unfold, esp from now as I refrain from some of those comments. And if authority is watching, perhaps pre-warn those individuals rather than working up to what we see happening everywhere in society when speaking the truth is clamped down upon by silly people carrying more weight of authority than they ought to.

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Replying to rhangus.:
paddle steamer
By DJKL
25th Aug 2021 12:10

You do not own this thread.

My conversation was with someone else, off topic so nothing for you to worry yourself over.

Why don't you......

p.s. you my have spotted I have actually given you an on topic steer re the boiler replacement elsewhere on the thread.

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By Paul D Utherone
24th Aug 2021 17:47

On the face of it you have:
- a gross gain before any improvement costs of £80k
- to be split equally between the two of them (assuming that they were joint owners)
- PPR for the period May 97 to whenever they stopped using the property as their main residence plus 9 months
- 2 x annual CGT exemption (again presuming they were joint owners)
- any net gain after all that will be at 18 & 28% property rates
- the likelihood of penalties to come on two missed 30 day CGT returns plus interest on the tax paid late

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Replying to Paul D Utherone:
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By Tax Dragon
24th Aug 2021 17:58

That you, SXGuy? Two accounts? Tut tut. It's even more upsetting that, after I've pointed out why that's potentially wrong, and you've used your search engines to look up my references, you don't adjust your comp accordingly.

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Replying to Tax Dragon:
By Paul D Utherone
24th Aug 2021 18:50

Tax Dragon wrote:

That you, SXGuy? Two accounts? Tut tut. It's even more upsetting that, after I've pointed out why that's potentially wrong, and you've used your search engines to look up my references, you don't adjust your comp accordingly.


Nope not two accounts - well not as SXGuy for the second, I have not used the second since this became my user name, & AWeb are aware of the second and happy with the position so long as I didn't start arguing with my other account, which I've no intention of doing :).
I started reading down the answers that seemed to get more heated without any possible starting points for the OP, so I just went with issues he might like to start looking at (though I suppose that my answer might seem more absolute).

I'll have another trawl back up the thread and try to ignore the chaff :)

EDIT: OK found your ref to s46 TCGA & yes I suppose possibly an assumption too far from me for that

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Replying to Paul D Utherone:
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By Tax Dragon
24th Aug 2021 18:50

Paul D Utherone wrote:

trawl

Paul D Utherone wrote:

Nope not two accounts

I believe you.

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Replying to Paul D Utherone:
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By rhangus.
25th Aug 2021 09:37

Paul d Utherone, yes v funny but thanks for your actual help. I did have this nailed by and large, and CGT due is in the ballpark, less than what they were allegedly told by their solicitor.

Yes, nice, concise, and too bad I had done after I noticed your efforts this morning this morning, but had to thank you anyway. I agree with that lot and thanks for the effort and more importantly the independence of thought, and not being one of the tedious baying mob who love to pompously put some people where they will and then you must stay for them to make themselves feel good, or, take the [***] back right at them.
So, from ignoring a pile of bile on here, to finding a relevant example from HMRC this year, along with TaxCalc assistance, and agreeing my provisional excel calc to that result, to the penny, I'm happy I've got the right figures in place.
I have to confirm a couple as one is an estimate.

Your third point is most pertinent for me. The dates for moving into their new house are not so relevant as when they first let out the flat, or not, hmm. Now it seems I'm unsure.
On reflection, it may be that they only get the Principle Private Residence relief, subject to the new 9 months, but for the period up to when exactly, buying new house, moving into new house, or when he finally moved in there from the flat because he was repairing it, and she was making the new home, or is it up to first rental. That is probably the crux Q for me here.

I have a 3k boiler replacement put in as necessary for the sale apparently, and so I just wanted to clarify with you, that would be a selling cost for the sale, or would it be capital expenditure, should be the same result?
Having never had a rental property client cease, can I confirm quickly with you that some expenses after the last tenant out, to get the property sold, are not some sort of post-cessation expenses allowable to deduct from the rental income, and that they can all be classed, like the boiler replacement 4 months after the last rental, 2 months before sale, they are all property sale costs?

Sorry for the couple of tricky or at least wordy Qs?

It's the tedious quotes they bore you with later that they don't seem to realise that it's just time-consuming nonsense as I can usually point out something worse from them and it's them who allegedly have the high standards, they critique others for not having.

Thanks for attention to date.

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Replying to rhangus.:
paddle steamer
By DJKL
25th Aug 2021 10:28

"I have a 3k boiler replacement put in as necessary for the sale apparently, and so I just wanted to clarify with you, that would be a selling cost for the sale, or would it be capital expenditure, should be the same result?"

It is most likely neither, the word replacement possibly gives a clue and suggests there was previously a boiler already in place.

I have no idea what if any formal training in tax you have ever undertaken, or how recently, but I reiterate you likely really need to pay someone to do the computation for this client.

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Replying to rhangus.:
By Paul D Utherone
25th Aug 2021 12:00

Funny? What the username or something else?

As has been mentioned elsewhere in the thread you will need to consider whether the lease on the flat might affect your calculations.

Additional costs for the capital gain will be improvement costs, and items mentioned do not seem to fit with that.

I think that you said that they are married so can only have one PPR between them. It's hard to say without full facts when the change of residence occurred, but I would probably err more towards when they bought it as their new home and she moved in than anything to do with the first let. Depends on the facts.

Not sure that I understand what you mean by:

"The clients bought a new house and then Mrs X, a little while later, not sure of exact months ..."

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By Paul Crowley
24th Aug 2021 21:43

@OP

Fee protection generally comes with a help line

https://www.accountingweb.co.uk/any-answers/fee-protection-insurance-15

I would use it (Even though I posted that I have not used it in three years ) for areas outside of comfort zone.
An example of which is VAT on buildings.
I think I know but as TD says there are unknown, unknowns
As VAT on buildings tend to be big figures, with capital goods scheme, I would pass my thoughts through the helpline or even suggest an appropriate specialist to client.

There is no shame in getting outside help.
No expert would be looking for my clients and my clients would not want the expert as the person dealing with the routine matters. Experts charge more.

If it is a struggle just phone a local small firm, get them to just do the CGT calculation and you do all the other stuff. Other firm does not even need to know who client is.

I have done similar myself in the past, not charging unless it takes more than a couple of hours.

A bit of goodwill makes everyone happy

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By Tax Dragon
25th Aug 2021 00:37

Did we ever find out what a capital extension was?

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