Sign up to get our free landlord tax strategies

To receive our seven FREE landlord tax saving strategies just simply complete the form below and the first strategy will be emailed to you immediately.

Sign up to get our free landlord tax strategies

Thank You!

Seven FREE property tax busting strategies reveal the secrets of how to legitimately beat the taxman and boost your property profits!
View All Questions

How is the capital gains tax calculated in my circumstances?

My wife and I bought our house in 1998 for £18,000 from the council, which was half the market value of the property at that time. We lived there until 2005, and from 2005 we rented out the house and moved to a new house that we bought. Now, in 2014, we want sell our first house for £170,000, and would like to know how much capital gains tax I would be liable for.

Arthur Weller replies:
Your capital gain is £170,000 - £18,000 = £152,000, or £76,000 each for you and your wife. You owned the house for 16 years, so your gain is £4,750 per year each. The first 7 years are exempt due to actual occupation, and the last 1.5 years are 'deemed' occupied, so you qualify for 8.5 years principal private residence (PPR) relief. 8.5 (years) * 4,750 (gain per year) = £40,750 PPR relief each. The remainder (£76,000 - £40,750) = £35,625 is taxable. However each one of you has a letting exemption of up to £40,000. See This letting exemption reduces the remaining gain to nil. 

Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

The first issue is free so click here to try today!

Got a burning tax question?

Why not submit a tax question to our tax advisors

Ask a Question