This is just to test how much I know (or more likely don't know), regarding CGT on property.
One of my clients has expressed an interest in selling his FHL.
The owner is looking to reduce/eliminate CGT if he sells. The figures are (very) rough. Bought for 100k, selling for 170k, making a capital gain of 65k after buying and selling fees.
Now lets say that he lived in it for 2 years before it became a FHL, and plans to live in it for a further year, so a total of 7 years. Is the PRR 36 months out of 84 and if he was to (say) live in it another year 48 months out of 96? So, based on 7 years he has a capital gain of 37.2k? and if it was 8 years a capital gain of 32.5k, then take off the CGT allowance of 12.3k? Not sure if a further 9 months PRR needs to be added for selling purposes or is that only if he chose not to live in it before selling?
I'm aware of the letting relief, and assume that if he didn't live in it himself at any time there would be no PRR and he could claim 40k relief?
Artois said
Thu Sep 8 07:10 2022
Hi John
Your thinking seems correct to me, the last 9 months are given automatically whether you live there or not,
BADR might also apply
Leger said
Thu Sep 8 17:36 2022
Thanks Doug, much appreciated.
Truemanbrown said
Sat Sep 17 00:08 2022
Leger wrote:
This is just to test how much I know (or more likely don't know), regarding CGT on property.
One of my clients has expressed an interest in selling his FHL.
The owner is looking to reduce/eliminate CGT if he sells. The figures are (very) rough. Bought for 100k, selling for 170k, making a capital gain of 65k after buying and selling fees.
Now lets say that he lived in it for 2 years before it became a FHL, and plans to live in it for a further year, so a total of 7 years. Is the PRR 36 months out of 84 and if he was to (say) live in it another year 48 months out of 96? So, based on 7 years he has a capital gain of 37.2k? and if it was 8 years a capital gain of 32.5k, then take off the CGT allowance of 12.3k? Not sure if a further 9 months PRR needs to be added for selling purposes or is that only if he chose not to live in it before selling?
I'm aware of the letting relief, and assume that if he didn't live in it himself at any time there would be no PRR and he could claim 40k relief?
Don't forget that an FHL can obtain Business Asset Disposal Relief (as well as business rollover relief and gift relief)!
Leger said
Sun Sep 18 08:57 2022
Truemanbrown wrote:
Don't forget that an FHL can obtain Business Asset Disposal Relief (as well as business rollover relief and gift relief)!
This is just to test how much I know (or more likely don't know), regarding CGT on property.
One of my clients has expressed an interest in selling his FHL.
The owner is looking to reduce/eliminate CGT if he sells. The figures are (very) rough. Bought for 100k, selling for 170k, making a capital gain of 65k after buying and selling fees.
Now lets say that he lived in it for 2 years before it became a FHL, and plans to live in it for a further year, so a total of 7 years. Is the PRR 36 months out of 84 and if he was to (say) live in it another year 48 months out of 96? So, based on 7 years he has a capital gain of 37.2k? and if it was 8 years a capital gain of 32.5k, then take off the CGT allowance of 12.3k? Not sure if a further 9 months PRR needs to be added for selling purposes or is that only if he chose not to live in it before selling?
I'm aware of the letting relief, and assume that if he didn't live in it himself at any time there would be no PRR and he could claim 40k relief?
Hi John
Your thinking seems correct to me, the last 9 months are given automatically whether you live there or not,
BADR might also apply
Thanks Doug, much appreciated.
Don't forget that an FHL can obtain Business Asset Disposal Relief (as well as business rollover relief and gift relief)!
Thanks.