do i have to pay capital gains tax on a property bought for £208,000 in 1999 and sold for £475,000 in 2006?

Question

the property was used as a b/b, letting two of the three bedrooms for 5 years prior to selling. it was sold as a private house,we then bought a property for £303,000 and banked the remainder

Answer 1

yes but no if not tell anyone

Answer 2

I believe the capital gain applies when you flip a property in a very short period of time like only couple of months for profit grater than the average increase of proper value , so after 7 years of living there and had improvements and it comes out at the estimated value , I believe you won't have to pay capital gain .

Answer 3

If it was used as a b/b and you didn't live there for any of the 5 years, you should owe capital gains taxes on the full capital gain.

Answer 4

Determining Tax Rates for Your Investments:

The total capital gains tax you pay is largely determined by the length of time an investment is held. Uncle Sam prefers rewarding long-term shareholders of American businesses. Although the individual tax rates are apt to change, the holding periods generally are not. It is absolutely vital that you realize the buy and sell date the government uses to determine the length of time you held the asset is the trade date (the day you ordered your broker to buy or sell the investment), not the settlement date (the day when the certificates changed hands).

Capital gains tax on assets held less than one year:

Appreciated assets sold for a gain after being held for less than a year receive the least favorable capital gains tax treatment.

Generally, the gain will be taxed at your personal income rate (which includes your earned income plus capital gains). In some cases, the capital gains tax can reach almost twice as high as those levied on long-term investments.

Capital gains tax on assets held more than one year but less than five years:

The Internal Revenue Service considers assets held longer than one year to be long-term investments. In recent years, the capital gains tax on these types of holdings has been 20%. If you are in the 15% tax bracket, however, you may be eligible for a lower rate. The substantial capital gains tax reduction for long-term investments is one of the reasons value investors tend to favor the buy and hold approach.

Capital gains tax on assets held for more than five years:
Assets purchased on or after January 1, 2001 that are held for five years or longer are subject to a reduced capital gains tax rate of 18%. Unfortunately, any investments purchased before this date are not eligible.

The ramifications of capital gain tax rates on your investment decisions:

The tax code clearly gives an advantage to those holding their investments for longer periods of time, making it easier for patient investors to build wealth. All investment performance must be reviewed net of taxes. To put things into perspective:
A woman in the 38.6% tax bracket invests $100,000 in a stock and sells it six months later for $160,000 (a 60% return). She owes $23,160 in taxes on her $60,000 capital gain, leaving her with a $36,840 profit.

The same woman invests $100,000 in a stock and sells it one year later for $50,000 (a 50% return). She owes capital gains taxes of $10,000, leaving her with a net profit of $40,000.

Despite the fact that her return was 10% lower in the second transaction, she ended up with 9.21% more money in her pocket. Capital gains tax implications should be a serious consideration for almost every investment.

Answer 5

Capital Gains tax is what you've gained after your initial investment. As it stands, the relief is £285K (I think) so £475K-£208K-£285K= No Capital Gains tax to be paid :-)

Answer 6

Yes at 40per cent,what a bummer..

Answer 7

the answer you want is yes.why worry your sitting pretty.

Answer 8

OH YEAH ! PAY IT NOW OR PAY MORE LATER.