CGT - Taper Allowance

[christopherwallter]

Hi! My partner and I are about to let out our flat. We have lived there for 2 years. If we then sell within three years will we be exempt from GGT?
Thanks for your help - this is all a bit new to me!
cx

[TaxationPete]

Yes and a lot longer due to Letting Relief, Taper Relief and CG allowances. Usually this sort of property can be free form CGT for 5, 6 or even 7 years. As you both lived there as your PPR then you both get Letting Relief of up to £40,000 each to further offset CG after the 36 months PPR exemption. Read
http://www.landlordzone.co.uk/forums/showthread.php?t=7082
and IR283 on HMRC.gov.uk web site. Regards Peter

[Tax Accountant]

Hi! My partner and I are about to let out our flat. We have lived there for 2 years. If we then sell within three years will we be exempt from GGT?
Thanks for your help - this is all a bit new to me!
cx

The period from date of buying to the date of selling is divided between periods exempt from CGT and period chargeable to CGT.

Total gain is deemed to accrue evenly over the whole period of ownership.

The exempt period is as follws:

Actual period of using as main residence.

Last 3 years of ownership (but any of this overlapping with the actual period used as residence is ignored).

The rest of the period is chargeable to CGT. But gains time-apportioned to the chargeable period could be reduced by the following:

Lettings relief of upto £40,000 for each person (Upto £80,000 if jointly owned).

Any remaining gain is reduced by the following:

Taper relief of upto 40%
Annual CGT allowance for each owner.

Hope this helps.


Ramnik