calculating stamp duty clawback

[casiopea]

I purchased a property in June 1999 and rented it out in October 2003. Unfortunately I think this means that when I go to sell it I might have to pay stamp duty clawback, as it was PPR for 4 years and 4 months and not 5 years.

I cant remember the exact stamp duty paid and am in the process of finding out, I do remember that it was the following budget that stamp duty was reduced so I paid more than I would have done if Id bought the property 6 months later.

How does this work? Im thinking about selling the property and will be checking with an accoutant as Ill have to pay CGT, is there a calculator to work out stamp duty clawback?

thanks
cas.

 

[ClubMan]

You just need to find out what SD rate an investor would have paid in the same property purchase in June 1999 and then that's your bill. Unless any interest and penalties apply for late declaration/return/payment. Revenue or a qualified tax advisor/accountant should be able to fill you in on the details (e.g. the rate in question).

 

[asdfg]

In calculating your CGT bill don't forget to deduct the 12 months from the time the property was rented out

Example
Value of house when bought 100,000
After applying multiplier 119,300
Value of house when sold 400,000
Buying and selling expenses 10,000
Months owned house 84
Months as an investment property 27

CGT Calc
400K - 119.3K - 10K 270.7 * 15/84 = 48.34K
Does not include any deductions you may have make in relation to improvements to the property, extensions etc

Not sure if stamp duty can be deducted as an expense. Think it can.

 

[casiopea]

Thanks asdfg,
I wasnt aware I could deduct the 12 months from the time the property was rented out. I thought once you passed the 12months the whole time counted.

Thats a bit of good news.
cas.

 

[minion]

I'm not exactly sure on the dates, but wasnt the time you bought the house, around the time that stamp duty for investors was 9%. It wasnt like that for long, so hopefully you'll pay a smaller stamp duty.

Whats the multiplier? - Where does it come from ? Is this a multiplier to get the value of the house in todays terms ?

 

[ClubMan]

Whats the multiplier? - Where does it come from ? Is this a multiplier to get the value of the house in todays terms ?

For details on CGT indexation relief see here.

Chapter 3

Calculation of Gain or Loss

...

4. Adjustments for inflation (indexation relief)

For disposals made on or after 1 January 2003 indexation relief will only apply for the period of ownership
of the asset up to 31 December 2002.

...

Chapter 5

Main Exemptions and Reliefs

1. Indexation

The expenditure allowable in computing the chargeable gain arising on the disposal of an asset
can be increased to take account of inflation for the period of ownership of an asset up to the
31 December 2002 (see Chapter 3, paragraph 4). The increase is, however, subject to limitation in
the case of a disposal of development land (see Chapter 4, paragraph 4). A schedule of the
inflation/indexation multipliers covering the Income Tax years 1995/96 et seq is set out in
Appendix 1.

...

For CGT indexation relief multipliers see [broken link removed].

 

[casiopea]

I'm not exactly sure on the dates, but wasnt the time you bought the house, around the time that stamp duty for investors was 9%.

I hope not!