I think I know the very basics of CG tax on second homes, IE it's 40% of any profit. I'm also aware that some expenditure on said property can be deducted from the sale value in order to reduce the CG bill, but what sort of costs can be attributed? Is it strictly repairs/renovations or can service charges/letting agent fees/buildings insurance costs/mortgage interest(!) and things like that be included? And whatever the answer to that questions is, do you then have to provide receipts for every penny you're trying to reduce the CG bill by?

The process behind all these questions is basically an attempt at working out an accurate figure of what we may or may not get if we sell our flat...

Thanks in advance for any help

 

i dont think you are lible if you lived in the property for over 3 years

just general property tax after 250k i belive

 

btw this is JUST a guess on what i over heard when i was gonna sell up so not 100 percent,,,, not even 50% if im honest

 

I lived it in for a couple of years, then bought a different place, so haven't lived in the flat for 4 or 5 years. Pretty sure that makes me liable.

 

You know there is a CG allowance right? £9200 2007/08

Expenditure that has increased the value of the asset and incidental costs of disposal - this may be able to include sale costs, but there seems to be a lot that's down to interpretation.

HMRC are quite helpful with this sort of thing apparently, give them a call and ask...

 

if you ask the inland revenue they will only be to pleased to help you take down all your details and send you a massive bill.
speak to a specialist cg accountant.

 

there is no capital gains tax to pay until a capital gain is made ie it is sold

 

A capital gain can arise if you gift a property away, it doesn't need to be a sale whereby you receive the money. The best thing to do is talk to an accountant, trust me, I'm a chartered accountant !

Jeff

 

i doubt he is thinking of gifting it away lol

 

^^

I'd rather just get a spot of free advice on a Ford chat forum!

Go on Jeff, you must be able to shed a bit of light on some of my initial questions..?

 

CGT reduced to 18% for gains made after 6 April 2008.

In essence, the gain is sale proceeds (or market value if you give it away) less the original cost.

Things like letting charges, mortgage interest etc get deducted from the rental income you receive in establishing whether you have any taxable rental income. This could be at 40% depending upon how much you earn.

Now for the caveat, this is a very simplistic overview so best go and see someone.

Regards

Jeff