Capital Gains Tax and Self Assessment

[longtallsally2]

Hi

Agh! I have to do the dreaded Self Assessment again. For the last 3 years we owned and rented out a small flat, part inherited, part purchased from dh's family - we bought out his other siblings. It was an albatross around our necks and I was very glad to sell it, 18 months ago, just about breaking even on our investment, but making only £10k profit shared between the two of us.

Please could anyone advise whether I need to tick yes for the declaring capital gains tax on the self assessment form? The capital gains we made are within the allowance, and I've just discovered from the HMRC site, that there is a criteria that Capital Gains does not apply if the property had less than half a hectare of ground. Pretty sure that it didn't as it was a small flat!

I have left this rather late to deal with haven't I? Bother! And thank you if anyone can advise and save me hours of sitting on the phone to HMRC to check.

1/2 hectare is to do with principal private residence relief. As you didn't live in the flat this does not apply to you. You will have to report a capital gain if 1) your share of the gain (I.e sales price less sales costs less purchase price/probate value) is more than £10,600 (assuming no other gains) or 2) your share of the proceeds is more than about £42,000. So assuming you owned the flat 50/50 if the total proceeds were over £85k you need to report the gain, regardless of whether there's any tax to pay.

No reliefs apply if you didn't live there during your period of ownership so your only difficulty is to establish the acquisition cost, which is made up of probate value for the inherited part and the market value of the rest as at the date of purchase from your relatives. So if you bought the rest for its approximate value (I.e. The relatives didn't 'do you a deal') then you just use the amount actually paid.

Oh you are a star, thank you. The sale price less sale cost was approx. £10,000 - jointly owned property, so £5k each - so . . . . do you know whether I simply tick the box to say that I don't have any CGT to pay or do I have to say yes, declare the figures and let the online calculator tell me that I don't have to pay any?

Thanks again

You declare the figures and then smile happily when the calculator says 'nothing to pay'.

all square and above board.

And one final question - having sold a stocks and shares ISA too last year, do I assume that I have to declare that under the capital gains tax bit too??

Honestly, I sound like a major financial wheeler dealer, don't I?! These things are all very very small items - someone a long time ago encouraged dh to try out these new-fangled things. Wish we'd just stuck to a building society account for our savings!!

Gains on stocks and shares ISAs are free from capital gains tax :)

I read riksti's post as saying that you have to declare if your share of the profit was £10,600 or if your share of the proceeds was £42k i.e. if the property sale figure was £84k plus.

Therefore you have to declare of the sale price was above £84k even if your profit was less than £10,600.

I have no useful knowledge on this just explaining that I interpreted Ritskis helpful post completely differently to the way you did.

Thank you. Declaring the property - yes, I read riksti's post like that too - not the ISA.

I know it doesn't take long, and I'm making a fuss - just trying to make sure I get it right and don't overcomplicate the bloody thing. Would much rather be MNetting , ironing, cleaning the kitchen floor, scrubbing the loo - anything, really!