CGT Timing

[stephenp]

Hi how do you calculate capital gain tax when purchase and sale is not in line with the tax year??

ie, full capital gain in year of purchase regardless of date and non in sale or is the gain apportioned on the month of the year.

Thanks
Steve P:D

[Tax Accountant]

Hi how do you calculate capital gain tax when purchase and sale is not in line with the tax year??

ie, full capital gain in year of purchase regardless of date and non in sale or is the gain apportioned on the month of the year.

Thanks
Steve P:D

Full gain is charged in the tax year in which sale takes place.

If sale is in December 2006, the gain belongs to tax year 2006-07 which runs from 6 April 2006 to 5 April 2007.

Ramnik

[stephenp]

Thanks but how do you allocate PRR if you have owend the property for 10 years and four months and lived in it for 3 years and 3 months

6 years 3 months would be allowable out of 10yrs and 4 mths however do you round it at al????

Thanks

[Tax Accountant]

Thanks but how do you allocate PRR if you have owend the property for 10 years and four months and lived in it for 3 years and 3 months

6 years 3 months = 75 months (including the final 36 months) would be allowable out of 10yrs and 4 mths = 124 months. However do you round it at all?

Thanks

PPR relief would be 75/124 x total gain after indexation allowance.

Rest (49/124 x total gains) would be chargeable gains but reduced by lettings relief (to the extent that any of the chargeable gain is arising as a result of letting the property), taper relief and CGT annual allowance.

Ramnik