Capital gains tax on rented property that was 50/50 but now 99/1?
3:07 PM, 14th July 2022, 4 years ago
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I have just sold a rental property and am slightly unsure regarding capital gains tax.
We made a profit of £77,000. The property was originally bought in joint names 50/50 basis with my husband, but we changed a few years ago as he is now disabled so I owed 99% and he owns 1%.
Does this mean although at some time it was 50/50 I can only claim the tax for this year, which means I pay approximately 13k in tax on my 99%?
Many thanks
Sarah
Editor’s Note:
HMRC CGT tax calculator >> https://www.gov.uk/tax-sell-property/work-out-your-gain
3 comments on this article
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Member Since January 2011 - Comments: 12260 - Articles: 1485
4:30 PM, 14th July 2022, About 4 years ago
Capital Gains is shared in accordance with beneficial interest. Therefore, you should have annulled your Declaration of Trust and notified HMRC you were 50:50 again before the sake completed if you wanted to use both of your annual CGT exemption allowances.
As it stands, you own CGT on 99% of the capital gain.
Member Since July 2022 - Comments: 1
10:29 AM, 15th July 2022, About 4 years ago
Reply to the comment left by Mark Alexander – Founder of Property118 at 14/07/2022 – 16:30
Thank you for confirmation.
That is what I thought, but just wanted it confirmed by a professional.
Sarah
Member Since March 2019 - Comments: 73
10:38 AM, 15th July 2022, About 4 years ago
shame you changed your share of ownership.
Your partner will not pay any tax as his allowance of £12300 will see to that.,However, after your own £12300 allowance you will pay CGT on your profit at a rate of 18% or 28% depending on your other income
because Capital gains are added to your income to work out the rate.
remember to claim costs of buying the property,legal etc
I would have an accountant do this for you.
Paul