Capital Gains tax

[riab]

I'm reasonably good at financial matters but this has me puzzled!
in the next 1-2 yrs I will be selling the house i bought (still in my name only) before I met DH. We'll also be selling the house we live in (in his name only) and will be making profit on both.
I udnerstand I need to pay CGT on the profit of the sale of my house and i think this is what happens:
cost of purchase
+
enhancements (double glazing)

Selling price = profit

profit

CGT allowance (about 8 or 9k?)

personal tax allowance as I'm not working = taxable amount

taxable amount qualifies for taper relief

taper relif

70% cos owned property for 8 years

70% of taxable amount

X

X is then taxed at 10% for the first 1,900(approx) then at 20% for the bit up to about 30k then 40% after that

is this roughly right (given that allowances change) or have I misread the incredibly long and complex instructions?

I'm no expert but I did read up on it recently. Take financial advice from a solicitor - the CGT allowance i think you're right is £8000 but of course that's for this year - you will also be entitled to the CGT allowance for every other year that you've owned the property. I don't think your personal allowance is relevant.
In any case you will need advice because presumably the house you own was your principal residence for some of those years? And the house dh owns is still his principal residence so there is definitely no CGT payable on that.
DEFINITELY DON'T change the ownership of either property to joint names until you've taken advice.
This is one of those areas where well-meaning people like me will give you advice, but you need to talk to an expert - it could save you £'000s.

Go and see a tax adviser. There is extra relief as both properties have at some time been your Principal private residence. Allowances also affected by whether either of the properties have ever been let. It's quite straightforward for an expert ( I was a tax consultants before becoming SAHM)but difficult to explain on paper - adviser will need to know various dates etc. Taper relief will be alot less than 70% as not a business property - you need to see an expert. Good Luck

mummycan, how much would a tax advisor charge me?

While I was still doing freelance I was charging about £250 to do the entire tax return - I would have done the calculations for you for about £100 - £150 depending on how much I had to chase you for info and complexity. Go to a tax shop and ask if they can do this as a one off exercise and ask them to quote up front. Good Luck.

MC
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