This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


A bit of data which remembers the affiliate who forwarded a user to our site and recognises orders from those who become customers through that affiliate.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Enrol now on the free landlord tax strategies course

To enrol in the 7 tax saving strategies email course complete the form below. The first module will be emailed to you immediately.

Enrol now on the free landlord tax strategies course

Thank You!

Free Tax Saving Strategies Course
The seven FREE property tax busting strategies course reveals 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