Tenants in common & CGT

[JDO]

My wife and myself own investment properties as tenants in common, with my wife owning the majority share of each property as she is a basic rate tax payer and I am a high rate taxpayer.

We are considering selling one of our properties during the 06/07 tax year.

The property in question has been owned since May 2005 so I am aware that we do not qualify for taper relief.

The property has been tenanted since May 2005 and has never been occupied by ourselves.

Can anyone answer the following questions...?

1. Do we both qualify for our full CGT allowance (currently £8500 each) although we own the property in unequal shares?

2. If the capital gain is less than our combine allowance (ie £17000) do we still need to inform HMRC?

3. Are there any other reliefs we could claim apart from our annual CGT allowance?

Regards

John

[Tax Accountant]

My wife and myself own investment properties as tenants in common, with my wife owning the majority share of each property as she is a basic rate tax payer and I am a high rate taxpayer.

We are considering selling one of our properties during the 06/07 tax year.

The property in question has been owned since May 2005 so I am aware that we do not qualify for taper relief.

The property has been tenanted since May 2005 and has never been occupied by ourselves.

Can anyone answer the following questions...?

1. Do we both qualify for our full CGT allowance (currently £8500 each) although we own the property in unequal shares?

2. If the capital gain is less than our combine allowance (ie £17000) do we still need to inform HMRC?

3. Are there any other reliefs we could claim apart from our annual CGT allowance?

Regards

John

Replies:

(1) Yes

(2) You cannot look at combined figures. You need to consider each person's share of the capital gains and then see if this is below the relevant figures. These figures are shown on page 2 of Self Assessment Tax Return under the Capital Gains Tax Question. For 2004-05, the relevant limits were sale proceeds of £32,800 and gains of £8,200 for each taxpayer.

(3) Loss Reliefs of prior years or same year, if any.

Ramnik

[JDO]

Thanks Karongo

Your reply has been very helpful

cheers

John

[Tax Accountant]

Thanks Karongo

Your reply has been very helpful

cheers

John

You are welcome. Pay it forward - do a good deed for someone else in return.

Ramnik

[johnj]

In the circumstances, what taper relief?

[Tax Accountant]

In the circumstances, what taper relief?

I don't understand what your question is.

I quote from the original query: ''We are considering selling one of our properties during the 06/07 tax year. The property in question has been owned since May 2005 so I am aware that we do not qualify for taper relief.''

Basically, taper relief applies only after the property has been owned for 3 complete years. Therefore, taper relief will only be applicable if the property is sold after May 2008.

Does this answer your question?

Ramnik