Capital Gains Liability

[CharlieC]

Any advice appreciated,

My relatives purchased a PPR and lived in a house from 81-87.
They still own this house and has never been rented.

They moved and rented another house from 87-89
They bought, lived in and sold another house from 89-92

From 92 to date they have been renting
They want to dispose of original house

Do they have to pay 20% on sale value or do they get exemptions for the years they were renting

 

[asdfg]

My relatives purchased a PPR and lived in a house from 81-87.
They still own this house and has never been rented.

What has happened the house since 1987. Is it just sitting there with noone in it.

They want to dispose of original house

Do they have to pay 20% on sale value or do they get exemptions for the years they were renting

AFAIA they do not have to pay CGT on the gain while the property was their PPR plus in some cases 12 months.
Doubt in this instance if you could claim the 12 months allowance to sell the property

Get independant tax advise

I would see the CGT bill calc something along the following lines
This is a very rough calc
Example
Selling Price ..........................500K
Less Selling Costs ...................10
Total ....................................490



Purchase Price ....40K
Costs say ......... ..1K
Total .................41K
Multiplier 2.687...110K ... .........110
Total (Gain ) ..........................380


Not PPR for say 240 months
Total period of ownership 312

Gain 380 K * 240/312= 329K

CGT = 329 * 20% = 66K
Certain assumptions made
Assume no improvements / enhancements

 

[CharlieC]

House has been sitting there unoccupied since 87.

They have been renting elsewhere since 87 apart from a period of 4 years where they bought and lived in and subsequently sold another house.

Have told them to go to a solicitor but again any pointers welcome

 

[ubiquitous]

They might be better off going to an accountant or tax advisor rather than a solicitor - if its CGT advice they need.

The non-occupancy of the house since 1987 may cause a credibility problem with Revenue leading perhaps to an audit. If there were genuine reasons behind this (eg use as hol home) this may need separate explanation on tax return or enclosures thereto.

 

[CharlieC]

They might be better off going to an accountant or tax advisor rather than a solicitor - if its CGT advice they need.

The non-occupancy of the house since 1987 may cause a credibility problem with Revenue leading perhaps to an audit. If there were genuine reasons behind this (eg use as hol home) this may need separate explanation on tax return or enclosures thereto.

Thank you for your reply- so are there exemptions for those years where they were renting?
The reason for not selling was they planned to retire there

 

[ubiquitous]

so are there exemptions for those years where they were renting?

No

 

[ubiquitous]

so are there exemptions for those years where they were renting?

No - unless for some obscure reason the property we are now discussing remained their PPR during that period. They will need to address this with advisor.

 

[CharlieC]

No - unless for some obscure reason the property we are now discussing remained their PPR during that period. They will need to address this with advisor.

Yes agreed thanks- they actually moved back there from time to time for summers and work reasons so they should talk to a specialist