Dubai_Chick

I am selling my apartment in London and want to know what costs will be involved such as estate agents fees, lawyers and so on. Is it subject to capital gains tax? Not sure if this is the right place to post it but hope someone can help.

Dago

Estate Agents - 2.5%
Lawyer - 500 quid
CGT 40% of (indexed) difference between buying and selling cost or 0% if it is your principle residence.

The test for residence is that you live in it.

...ish

Beebop

It's more complicated than that.

http://www.direct.gov.uk/en/MoneyTax...ome/DG_4016337

Also solicitors charge way more than that for conveyancing in London. You can always sell by auction if you want a quicker, more certain sale but you may realise less. Swings and roundabouts.

Dubai_Chick

Thank you. I moved out of it a few months ago and now rent it out. I have made a large profit on it which I dont really want to share with the tax man

Dubai_Chick

Thank you for this really useful link. I read about how you go about paying CGT and it states the following:

How you pay CGT
If you've received a Self Assessment tax return, follow the guidance to decide if you need to fill in the capital gains pages as part of that return. The return tells you how to obtain these pages if you need them.

If you don't usually complete a tax return, but wish to report gains or losses, contact your local Tax Office and ask them to send you a return and the relevant pages. If you have CGT to pay you must tell your tax office in writing by 5 October following the tax year. There is a time limit for claiming losses.

Do they really rely on the seller's honesty to pay this tax? Or when you appoint a lawyer would they probe this and then deduct the tax from the proceeds of the sale?

Beebop

It goes on what is in the tax return but then they have beefed up Stamp Duty so the buyer's solicitor has to tell the Govt. lots more info......

I wouldn't try to avoid it but if you stay abroad for 5 years, then the liability for CGT ceases.....maybe worth a few quid to consult a tax advisor.....

sandrainaus

Don't want to sound stupid but

I have been out of the country for 2 yrs and I have a property I rent out in the UK.
I will be going back to the UK in 2008, but not to the property, I was going to sell it and move to another area, will I still have to pay Tax


Sandra

dunroving

How long have you owned the property, and did you ever live in it or has it always been a rental?

Dubai_Chick

Has stamp duty not always been paid like that?

Thanks for the information on the CGT. Best get myself an advisor. I want to put the money into a property in Dubai as rents are so expensive so will not return to the UK for many years. Perhaps I just need to bag myself a rich Arab

sandrainaus

Hi Dunroving

I have owned it for 7 yrs and lived in it until feb 06 when we moved here to OZ. (was not ready to cut all ties with the UK just in case)

We are now moving back to the UK in July/Aug 2008, We was looking at selling it before we get back, so we will be in a position to to buy in a different area.

but now I am worried that we will need to pay CGT

We do not own any other property.

Sandrax

louie

If you sell a property which was your principal private residence (PPR) from when you bought it until a date less than three years before you sell it, there will be no UK capital gains tax liability. You might also qualify for a further relief if you have rented out a property which was at some time in your ownership your PPR. So Sandrainaus, as long as you sell before Feb 09 there won't be any CGT and you may well be able to extend that a few months if necessary. Of course, you may have a liability to tax in some other country...

Also you might qualify for taper relief if you have owned it more than three years.

ShozInOz

If you are in the UK, try www.housesimple.co.uk. This is an internet estate agency and costs are £1000s lower. But you need to do the tours (they do the rest).

sandrainaus

Thanks for that