CGT allowance

[JDO]

If my wife and myself sold one of out BTL properties and the gain we made did not use our CGT allowance, can we then sell another BTL property in the same tax year and use our CGT allowance again...?

Rgds

John

[hmy7k]

You can each use the full allowance once in a tax year.

This could be the result of one or more transactions you do not get the full allowance for each transaction.

[TaxationPete]

You must have only owned these properties a short time for such a small gain. Have you actauly rented the properties out yet. ? I ask this as if you have not then it could be deemd by HMRC that this is "an adventure in the nature of trade" and Income Tax will apply not CGT. This catches out investors that buy 'Off Plan' then sell on completion. There is even a web site that boasts that their Off Plan deals are FREE of CGT if you sell then on completion. Correct they are as this is an Income Tax issue which they do not declare. Regards Peter

[JDO]

Yes we have rented out the properties.

I am trying to plan ahead for early 2008 to see if we can sell one property towards the end of the 07/08 tax year, and then sell another property early in the 08/09 tax year.

I just needed clarity on the CGT position

Thanks for your comments

John

[TaxationPete]

Your rental business is treated as a whole, so your gains added together in any tax year so you can sell two properties and if the gain exceeds 2 allowances presently £9,200 each then so be it, if you sold one and it did not use the allowances then yes you can sell another and use up all the allowance up for that year. I hope you are doing the CGT calculations properly, I am still concerned you only appear to have made a small gain. The gain is the price paid at purchase deducted from the sale price, minus perhaps some enhancement costs all the sale and legal fees with Taper Relief if applicable then deduct your allowances and then the gain left is taxed usieng the individuals gross salary/income to apportion the Tax level i.e. 10%, 20% or 40%. Regards Peter