Cgt

[Gigi]

Having searched the forum and found helpful answers I think I am happily contemplating not having to pay CGT if I sell. Just to clarify something .....

Am I right in thinking I can claim purchase and sale fee's (solicitors, estate agents etc) if the property was bought solely for let and was let from day one (not that the later has anything to do with it)!

In anticipation I would just like to thank all the 'knowledgeable' bods who give their expertise free of charge on this forum. I have experiences of other forums in other spheres and feel this is second to none (maybe joint first)!

Thanking you all

[Tax Accountant]

Having searched the forum and found helpful answers I think I am happily contemplating not having to pay CGT if I sell. Just to clarify something .....

Am I right in thinking I can claim purchase and sale fee's (solicitors, estate agents etc) if the property was bought solely for let and was let from day one (not that the later has anything to do with it)!

In anticipation I would just like to thank all the 'knowledgeable' bods who give their expertise free of charge on this forum. I have experiences of other forums in other spheres and feel this is second to none (maybe joint first)!

Thanking you all

The simple answer is YES.

Comprehensive answer is as follows:

Following expenses of selling are deducted from the sale price to arrive at sale proceeds:
Advertising costs of selling the property (if applicable)
Agent's fees and costs for selling the property
Solicitor's fees and legal disbursements for selling the property

From the sale proceeds as above, the following is deductible in computing Gross Capital Gains:
Purchase Price of property
Agent's valuation fees
Solicitor's fees and all legal disbursements for buying the property
Capital expenditure and improvements since purchase and which have previously not been claimed as repairs against rental income.

From the Gross Gains as above, you have to deduct Indexation Allowance from date of purchase to 5th April 1998 to arrive at Indexed Gains.

Indexed Gains as above is then reduced to take account of PPR relief (including permitted absences from the property) if the property has been used as your only or main residence at any time in your ownership.

Remaining gains is then reduced by lettings relief if the property has been used as your only or main residence and also let as residential accommodation at any time in your ownership.

Remaining gains is then reduced to take account of non-business asset use taper relief in respect of ownership of the property since 18 March 1998 to date of sale.

Remaining gains is termed Chargeable Gains which is reduced by personal annual exemption.

Any balance is then added to the top slice of your other taxable income and gains in the tax year of disposal and taxed at 10%, 20%, and 40% depending on how much of the gains fall into each of the tax brackets.

Ramnik

[johnj]

It does not sound as if PPR relief is available if the property was to be let from day one, so dont rely upon it.
CGT is at 22% or 40% being a persons basic or higher rates of tax, the 10% rate of income tax is only available for dividend income recieved by a basic rate tax payer and is met by the 'notional' tax credit of 10% carried by/with dividends from a UK company.

[Tax Accountant]

It does not sound as if PPR relief is available if the property was to be let from day one, so dont rely upon it.
CGT is at 22% or 40% being a persons basic or higher rates of tax, the 10% rate of income tax is only available for dividend income recieved by a basic rate tax payer and is met by the 'notional' tax credit of 10% carried by/with dividends from a UK company.

John J,

Your reply is incorrect and misleading in many respects.

(1) Who said that PPR relief is available or is being relied upon?

(2) The tax rates of 22% and 40% are applicable to income tax and not CGT.

(3) 10% is indeed the dividend rate tax as well as the notional tax credit on dividends received. However, the starting rate tax is also 10% for both income tax and CGT.

Ramnik