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What will be all our capital gains tax positions?

Question I am now the sole owner of a property I lived in and jointly owned with my late wife over 20 years ago. The property has been rented over the last 15 years and now I am selling it. I intend to gift two-thirds of the proceeds to our two adult children. Could you please let me know the capital gains tax (CGT) position here?

Arthur Weller replies:
For the period you lived in the property, and for the last 18 months of ownership, you are eligible for principal private residence (PPR) relief from CGT. Additionally, for the 15 years you rented out the property (less the last 18 months) you are eligible for lettings relief, which cannot be more than: (a) the figure of £40,000; or (b) the PPR relief you are claiming, whichever is the smaller figure. You need to make two calculations, for the two halves of the property; one for the half you always owned, and the second for the half you inherited from your wife when she died. Your base cost for this second half is the probate value (i.e. the value of her half when she died and you inherited from her).

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.

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