UK Landlord Forum / Life

My wife and i have a joint mortgage on a buy to let property , we were wandering if were to sell what capital gains tax allowance would we be entitled to and would the capital gains tax be calculated on our joint income. thanks in advance for advice and help. my wife and i purchased property for 77k and are going to sell for 112k. we paid 15k to renovate includes professional costs. our joint income equates to 48k. thankyou

Income doesn't come into it.  CGT allowance is £10,900 each this year.  Obviously minus your capital expenditure for renno work.

Roughly CGT should be on £8,200.

If you both bought the property, you both can use your capital gains allowance.

If you sell before April 5th, the tax allowance is £10,900 each.
If you sell after that it goes up to £11000 (unless the budget changes it next week).

You capital gain is 112k-(77k+15k) - which is £20k.
This is less than your combined CGT allowance so you shouldn't pay any CGT.

While CGT is nothing to do with income, the rate you pay depends on whether you are a higher rate tax payer or not.
In this case, you shouldn't have to pay anything, so it's academic.

I am not a tax expert or accountant, so please seek professional advice.

Mr Keates is spot on.

Sell and don't worry about paying CGT.

(the only thing we dont know is if you and your wife have made other capital gains in this, or the next tax year, if you have this will have an impact).

There are a few rinky dinks you can employ if you think you might pay tax, like move into the property before sale, but as it's irrelevant, I'll move on.

Enjoy!

Quote from: boboff on March 13, 2014, 08:13:13 AM
...the only thing we dont know is if you and your wife have made other capital gains in this, or the next tax year, if you have this will have an impact.

Good catch!

Stupid me saw the sale price as 122k

thank you everyone for your advice. both my wife and I have not had any other capital gains this year and do not intend to next year either. its really good news that we can use joint capital gains relief due to the buy to let being jointly owned.