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deandevy
21-09-2005, 04:24 PM
I own a house which I bought for £31500. It costs £7000 to renovate. I now wish to sell for roughly £70000. It has been rented out for 2 years and is now empty. What CGT is likely to be paid? Is there any way to avoid paying this?

Any help would be appreciated.
Tax Accountant
23-09-2005, 12:45 AM
Aah, I have now caught up with you. You are saying that it is quite in the tax section but surely you are not expecting instant replies on the same day to each and every query, especially as no one is paying us any fees for answering in these forums.

You have now posted the query in the rental section of this forum and it has been answered there.

Ramnik
deandevy
23-09-2005, 08:18 AM
Hi Ramnik

Thanks for the reply. Please don't think I was being rude by saying it is quiet here. This CGT thing is really confusing and I have been told so many things and wanted to find out from someone with some knowledge.

I think the best thing for me to do is get an accountant even though I wanted to avoid this.

Claire
Tax Accountant
25-09-2005, 02:34 AM
Tax is never straightforward at the best of times.

Ramnik
johnj
18-10-2005, 03:13 PM
Why do you think that you are liable to capital gains tax, with the consequent annual exemption? If the Inland Revenue can sustain the view that you bought it to do up and sell on albeit that you rented it out for a while then you are trading and do not have the annual CGT allowance to set against the profit.

Do a search on the web for 'the badges of trade' or email me and I will send something to you.

Always be careful when turning over property, it can be as much a trade as any other
Tax Accountant
18-10-2005, 10:39 PM
In my opinion, a house let for 2 years is not a trade but an investment, especially so if the owner is not connected to the building trade.

There is no indication to say that the owner had intended to act as a developer.

Ramnik
johnj
19-10-2005, 10:37 PM
Look at the 'badges of trade' and Inland Revenue instructions. The period of ownership is irrelevant.
Tax Accountant
20-10-2005, 01:18 AM
Look at the 'badges of trade' and Inland Revenue instructions. The period of ownership is irrelevant.

On the basis of limited information given by the querist, in my opinion this is not a trade if the owner is not connected with a building trade.

Having said this, I take your point that all too often the possibility of a trade as a developer is not considered when one addresses property queries.

Ramnik