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Forums > Active > The Netrent Forum
Subject: Capital Gains Tax

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nicho1960
Posts:1
03 Oct 2006 07:37:53 Alert 
I bought a property in dec 05. PP £95K. Can sell now for £110K. The current tenant spent £5K own money on the interior. Im unsure if i will have to pay CGT on the full £15k profit or if i am able to pay the tenant her £5K and pay the CGT on £10K profit. Any ideas - obviously i will be offsetting the selling fees etc so it wont be a full £15/10K. Thanx
thegameplayer
Posts:7
04 Oct 2006 13:13:18 Alert 
Hi Nicho
Every tax payer in England has a CGT allowance of about £8500.00 per year. It will be difficult to offset the £5000.00 the tenant paid out as these are probably seen as improvements and not REPAIRS, unless you can prove otherwise.
Therefore I would assume you will pay CGT at the 40% rate on £7500.00
However, if you are married you will be able to claim about £17000.00 thus reducing your tax liability.
I would recommend you seek advice from an accountant as each persons tax circumstances are different.
warm wishes
Thegameplayer

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Forums > Active > The Netrent Forum > Capital Gains Tax


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